Oil rig arrives for Cuba offshore exploration work

HAVANA Thu Jan 19, 2012 1:54pm EST

Oil rig Scarabeo 9 is seen in the horizon of Cuba's waters in Havana January 19, 2012. REUTERS/Enrique de la Osa

Oil rig Scarabeo 9 is seen in the horizon of Cuba's waters in Havana January 19, 2012.

Credit: Reuters/Enrique de la Osa

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HAVANA Jan 19 (Reuters) - A Chinese-built drilling rig to be used in the first major exploration for oil in Cuba's offshore waters arrived on Thursday off the coast of the communist-ruled island's capital.

The rig, known as Scarabeo 9, could be seen as it sailed slowly westward, miles off the north coast and Havana's famed Malecon seaside boulevard.

Its arrival went mostly unnoticed by people in the capital, but it was a long-awaited and landmark day for the island's oil industry, which believes the platform will tap into rich oil fields in Cuba's part of the Gulf of Mexico.

Starting next week, Spanish oil giant Repsol YPF, working in partnership with Norway's Statoil and ONGC Videsh, a unit of India's Oil and Natural Gas Corp, is expected to drill at least two wells in Cuban waters about 70 miles from the Florida Keys.

Malaysia's Petronas, in partnership with Russia's Gazprom Neft, will also drill a well using the Scarabeo 9. The rig has been contracted from its owner Saipem, a unit of Italian oil company Eni.

All the wells will be in water at least a mile deep, like that of the BP well that blew out and spilled millions of gallons of oil in the U.S. part of the Gulf of Mexico in 2010.

Cuba has said it may have 20 billion barrels of oil in its parts of the Gulf, but the U.S. Geological Survey has estimated about 5 billion.

Repsol drilled the only previous offshore well in Cuba in 2004 and said it found oil, but said it was not "commercial."

It has been trying for several years to bring another rig for more drilling, a task that was complicated by the longstanding U.S. trade embargo against Cuba and the limits it places on the amount of U.S. technology that can be used.

The Scarabeo 9, a semi-submersible rig that floats on four giant pontoon legs and has living quarters for more than 200 crewmembers, was built in China, then sent to Singapore in late 2010 for completion.

The only part of the rig said to be American-made is the blowout preventer, the part that failed in the BP disaster.

Cuba is hoping oil will ease its chronic economic woes and bring energy independence. It currently receives 115,000 barrels a day from its oil-rich socialist ally Venezuela.

Cuban exile leaders in the United States fear that oil could help the communist government stay in power for years to come. They have filed several pieces of legislation trying to scuttle the offshore project.

Floridians have worried that Cuba could suffer a BP-style blowout that would send oil into the Straits of Florida and stain the coast and coral reefs of both the island and the U.S. state 90 miles to the north.

Drillers in Cuban waters could get within about 45 miles of Florida, more than twice as close as they can in U.S. waters, where no oil exploration is permitted with 125 miles of the Florida coast.

At Repsol's invitation, a team from the U.S. Bureau of Safety and Environmental Enforcement and the U.S. Coast Guard inspected the Scarabeo 9 last month in Trinidad and Tobago and found it to "generally comply with existing international and U.S. standards."

(Reporting by Jeff Franks; Editing by Tom Brown and Cynthia Osterman)

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