Remember that dry offshore Cuban oil well? UPDATED

Last month Spanish oil company Repsol came up dry after drilling in more than 6,000 feet of water off Cuba.

In an interesting turn, guess who’s buying the platform? PDVSA!

Yes, Hugo Chavez’s oil company.
Petronas, PDVSA to drill off Cuba (that’s Petronas, not patronus), so now the Malasians, the Venezuelans, and the Russians are involved with that particular platform:

Cash-strapped Cuba’s long quest for black gold took another twist on Tuesday with the announcement that a Malaysian firm and Venezuela’s PDVSA will use an advanced oil platform vacated by Spain’s Repsol.

Repsol had been doing exploratory drilling since February offshore not far from Havana, but on May 22 said it had not found oil with the Scarabeo-9, a state-of-the-art US$500,000-a-day platform.

“The Scarabeo-9 platform used in exploratory drilling in the field Jaguey-1X has been moved to the Catoche-1X well area,” said a statement from state oil firm Cupet read out on an official news broadcast.

The new well, “where drilling started May 24,” is operated by a Malaysian firm that is a subsidiary of Petronas “on a risk contract with Cupet in which Russia’s Gastrionet also is taking part.”

Once drilling is complete on the current well, Scarabeo-9 will be moved to an area called Cabo de San Antonio 1X, run by Petroleos de Venezuela SA (PDVSA), the Cupet statement added, without giving dates.

It’s not clear if Repsol got reimbursed for its state-of-the-art platform, since the article doesn’t mention that any money actually changed hands, but

Cuba’s economic zone in the Gulf is divided into 59 blocs. They include ventures with Repsol (Spain), Hydro (Norway), OVL (India), PDVSA (Venezuela), Petrovietnam, Petronas (Malaysia) and Sonangol (Angola). China and Venezuela have said they intend to help Cuba triple its refining capacity by 2017.

Alberto de la Cruz poured some snark on the news,

Considering how Venezuela’s PDVSA is hemorrhaging money due to corruption and mismanagement in spite of that country’s oil wealth, this new venture in Cuba ought to go real well

Oh, come on, Alberto, there is such a thing as boundless optimism in Communism,

But if Cuba locks in its energy independence, it could lurch from a cash-poor developing nation into a flush oil exporter overnight, potentially breathing new life into its one-party state.

Correct me if I’m wrong, but the last time anyone became a “flush oil exporter overnight,” they made a TV series,

UPDATE,
Read Kermit’s comments here and here.


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2 Responses to “Remember that dry offshore Cuban oil well? UPDATED”

  1. Kermit Says:

    Some really mixed understanding here about Scarabeo-9. It is a semi-submersible drilling rig NOT a platform (at least in offshore oil jargon). Calling it a platform would mean a PRODUCTION platform, which has a completely different function.

    Scarabeo-9 is owned and operated by Saipem a subsidiary of the Italian state oil company ENI.

    So what has happened is tat Repsol was renting Scarabeo-9 on a day rate of likely around $400,000 per day PLUs all expenses even the crew working it. The Petronas led consortium would be paying a similar rate.

    http://www.saipem.com/site/article.jsp?idArticle=5430&instance=2&node=2012&channel=2&ext=template/37DueColonne&int=article/1DefaultArticolo

  2. Kermit Says:

    The lead company in this lease is Petronas and is the operator of the lease. They are calling the shots, NOT PDVSA.

    This is how almost all offshore leases operate with several partners spreading the investment costs and risks, as well as rewards. Even with slave labor such leases cost in the $billions to drill then get to market.

    This is far from the Jed Clampett days.