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Cuba To Drill 5 Oil Wells In Gulf Of Mexico This Summer

By ANDREA RODRIGUEZ   04/ 5/11 05:24 PM ET   AP

HAVANA -- Cuba and partner companies will begin drilling five oil wells in the Gulf of Mexico this summer in hopes of locating enough crude to justify the costly exploration, an official said Tuesday.

"The prospects are very promising" of finding valuable reserves, said Manuel Marrero, an official with the Ministry of Basic Industry.

Cuba's domestic production is exclusively heavy oil with a high sulfur content. Its offshore Gulf waters could contain large quantities of lighter, sweet crude, although a test well in 2004 turned up only modest deposits.

Studies since then have pointed to "oil traps" in the marine floor, persuading partner companies to take on the expensive task of exploration in deep water, Marrero said during an earth sciences convention.

The drilling is expected to run through 2013.

The Cuban government has designated 59 blocks in Gulf waters encompassing 43,200 square miles (112,000 square kilometers) where private energy companies have said they could drill deep-water test wells.

The area opened for international investment in 2000, and currently a half-dozen companies, including Spain's Repsol-YPF, have contracted for 22 of the blocks.

None of the companies are American – due to Washington's decades-old ban of U.S. business dealings with the communist-governed island – although some U.S. firms have expressed interest in the past.

Marrero repeated Cuba's position that it would be open to partnering with U.S. companies. "Any company could participate under Cuban laws," Marrero said.

Earlier this year, Brazilian officials announced that country's state-run energy giant, Petrobras, would withdraw from the Cuban area.

"They had a small block, barely 1,500 square kilometers," Marrero said. "They discovered prospects, but that can't compete with the hundreds of prospects they have" in Brazilian territory.

According to geologic studies conducted by several institutions, some of them U.S.-based, Cuba's Gulf reserves could be 5 billion to 9 billion barrels of crude.

Nearly a year after the Deepwater Horizon disaster that killed 11 workers and led to more than 200 million gallons of oil spewing from a BP well a mile beneath the Gulf of Mexico, Marrero assured reporters that Cuba's exploration will be carried out safely.

"The equipment that will be used is the most modern, the safest. The regulatory framework is very strict, and the companies that will drill are prestigious and experienced," he said. "I don't think we are going to have any more risks."

Earlier this year, Cuba reported its 2010 production totaled 4 million tons of petroleum equivalent – oil plus natural gas – or about 46 percent of its domestic consumption. The rest it obtains from Venezuela on preferential terms.

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Filed by Travis Donovan  |  Report Corrections