Offshore staff
(Cuba)-Spain's Repsol has joined forces with Norway's Norsk Hydro and India's ONGC Videsh in an effort to find oil reserves off the coast of Cuba.
This move by non-US oil companies comes as some US lawmakers, such as Idaho's Republican Senator Larry Craig, are proposing prospecting activities in Cuban waters. Current high oil prices, as well as US environmental laws which make prospecting in nearby US waters all but impossible, are cited as the main reasons for renewed interest in the region.
The roadblock to US involvement continues to be the economic embargo enacted by the US on the communist country.
For now, US companies will have to focus their efforts on the other zones in the GoM. The Gulf's waters were divided into economic exclusion zones of the US, Mexico and Cuba under a deal which is still in effect signed during the government of then-US president Jimmy Carter.
The Cuban deal with ONGC Videsh and Norsk Hydro, to be signed officially in Havana May 23, technically is not a new contract.
"Those companies are joining the existing one with Repsol to share risks," an unidentified European diplomat said.
Repsol has rights to six of the 59 prospecting areas the Cuban government has been auctioning off since 1999. It carried out its first drilling in 2004 and while oil was found, Repsol said the quality of that crude was not commercial grade.
Repsol has since been looking for partners to share the investment burden, and ONGC Videsh and Norsk Hydro each will be picking up 30% of the expenses, other sources said.
Among other companies with prospecting rights are Canada's Sherrit International and Brazil's state oil giant Petrobras. There have been reports that China was involved in prospecting activities, but Cuba has not announced a Chinese deal.
Cuba produces about a third of the oil it consumes, with the rest imported under favorable terms from its key ally Venezuela.
5/11/2006
