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New fears over Cuban plans to drill for oil in 2011

The talk has been going around for years. Cuba would soon allow drilling off its shores. Foreign companies would begin sinking offshore rigs there shortly. Florida's Keys would be at risk.

The drilling would start in 2008. No, it would be 2009. No, wait, it would be 2010.

Now, with this year's Deepwater Horizon disaster fading from headlines if not from the Gulf of Mexico, the talk about Cuban drilling is back. Stories in both the New York Times and the Miami Herald this week reported that a Spanish company will begin drilling new exploratory wells in Cuban waters just 50 miles from the Florida Keys in 2011.

This time, Cuba experts say, the talk is serious. The reason: Like everyone else these days, Cuba needs the money.

Cuba used to produce up to 10 million tons of sugar a year, but that has fallen to less than 2 million tons, said Wayne Smith, director of the Cuba program at the Center for International Policy in Washington. Nickel, another big Cuban industry, has seen worldwide prices drop, he said.

The island nation's only other industry is tourism, "and given the worldwide recession, they haven't seen much tourism lately," he said.

Federal officials are certainly taking the talk of drilling as if it were real this time. The new U.S. Coast Guard commander for the Miami area said Thursday that his agency is looking "very seriously" at Cuba's plans. Rear Adm. William D. Baumgartner said all involved U.S. agencies are reviewing contingency plans in the event of a spill.

The possibility of a spill is, of course, what concerns people in Florida. Computer models show that a spill in that location would quickly wind up in the gulf's loop current, said David Guggenheim of the Ocean Foundation.

Oil would soon wind up coating the beaches and coral reefs of the Keys, harming not only tourism and fishing there but also the priceless natural areas in the Dry Tortugas National Park, the Florida Keys National Marine Sanctuary, the National Key Deer Refuge and other sensitive lands.

Then the current would sweep the oil northward to taint the beaches along the state's Atlantic coast, he said. That's where it would get into the John Pennekamp Coral Reef State Park, among other pristine areas.

It wouldn't be kind to the Cubans' own beaches, either — which would likely doom what was left of their own $2 billion tourist industry.

That's the exact scenario that the Cubans themselves feared would happen during the Deepwater Horizon disaster, Guggenheim said. That's why they invited American scientists to help them map out a response, should the oil flow their way.

"They've expressed a horror at what they saw" happening along the Gulf Coast, Guggenheim said. "They've really had the benefit of learning from our mistakes."

He predicted the Cubans would be more careful with offshore drilling in part because the proposed drilling area is near one of the country's most popular tourist areas, Varadero.

However, Repsol, the Spanish company that plans to drill, has a somewhat spotty safety record. In February 2008, its operation in Ecuador experienced a crude oil spill near the Yasuni National Park in a rainforest area. In February 2009, another oil spill occurred in Ecuador's Amazon region after a rupture in a pipeline.

The U.S. Geological Survey has estimated Cuba's offshore fields hold 4.6 billion barrels of oil and 9.8 trillion cubic feet of natural gas and said the area has "significant potential.'' U.S. oil reserves are estimated at 21 billion barrels.

Cuba already has a small coastal drilling industry, but all its rigs are onshore. They drill down, then angle out horizontally to reach reservoirs 3 miles offshore, said Jorge Pinon, a former oil company executive who's now a visiting fellow at Florida International University's Cuban Research Institute.

The communist nation gets most of its oil from Venezuela at favorable prices. Even if the new rig finds oil, Smith said, it's likely to be sold to other countries to bolster Cuba's faltering economy, not kept in the country.

Six years ago, Repsol drilled a test well 20 miles off Cuba's northern coast and said it discovered hydrocarbons, indicating the presence of oil, but no reservoir to tap into. However, company officials vowed to return and drill a second well looking for the reservoir.

Since then, there have been several announcements over the years that a second well would be drilled. Each time the project has been put off without explanation. Repsol officials did not respond to a request for comment Thursday.

Pinon said the reason was the U.S. embargo on Cuba forbids any machinery with more than 10 percent American-made components from being brought into the country. No rig met that rigorous test — until now, he said.

This year Repsol signed a contract for a semisubmersible Italian rig built in China that won't violate the embargo. The rig can operate in depths of 11,811 feet — twice as deep as the doomed Deepwater Horizon rig.

The first block Repsol is expected to explore lies under 5,600 feet of water — 600 feet deeper than where BP's Deepwater Horizon well exploded in April — and about 55 miles south of Florida's Marquesas Keys.

Even if this new rig hits a prime spot, though, another two years are likely to pass before any production wells begin pumping out oil, he said. In the meantime, Pinon said, Floridians might want to keep an eye on another neighbor, the Bahamas. That island nation has leased several blocks just northeast of Cuba to companies interested in offshore drilling, which could begin in 2013, he said.

Information from Reuters and the McClatchy Newspaper group was used in this report.

New fears over Cuban plans to drill for oil in 2011 09/30/10 [Last modified: Thursday, September 30, 2010 10:34pm]
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