Russia to Drill for Oil off Cuban Coast
Russia’s energy corporation, Gazprom, announced its plan to drill for oil off Cuba’s coast. Gazprom Neft, the oil arm of the company, bought a thirty percent share of four exploration blocks from a Malaysian corporation. The Russians will now take over all of the operations from the Malaysians, although Gazprom has little experience in offshore drilling. The Malaysian company, Petronas, originally leased the blocks in 2007, but the agreement can be extended through 2037 upon the finding of oil, and through 2042 upon the finding of gas.
It is currently unknown how much oil is available, but experts believer the waters could hold plentiful reserves. Cuban authorities estimate that there are up to twenty billion barrels, but the U.S. geological survey estimates the reserves to be around 4.6 billion barrels. Currently, Cuba only produces around 60,000 barrels of oil per day from its offshore wells, and it relies on Venezuela for the rest of its oil needs.
Russia is not the only company interested in Cuba’s waters. Norway, India, Venezuela, Vietnam and Brazil have also approached Cuba about exportation rights. But, the United States companies are unable
to join in due to the long-standing US embargo. Cuba has announced its willingness to discuss safety concerns with US companies. According to oil expert Jorge Pinon, the new market in Cuba would be a huge benefit to US companies. “For the U.S. offshore oil industry, Cuba is basically an extension of the Gulf of Mexico. It would be ironic that Russians could drill closer to our shores than American oil and gas companies.” Ending the embargo and allowing US companies to drill offshore would also create hundreds of new jobs and spur billions of dollars in revenue, a fact that oil lobbyists are stressing on Capitol Hill.
Safety is also a concern for Americans. Floridians worry that a well blowout, similar to the BP oil spill, could cause major damage off the coast, while Gazprom would be outside the US’ jurisdiction (the drilling rights do not extend into US territory, but the closest is about fifty miles off the coast of Key West). According to some officials, a well blowout could reach the Florida keys in as little as three days, and Cuba and Gazprom both lack the technology to contain such a spill. Cuba has announced its willingness to discuss safety concerns with US companies, but the embargo limits the ability of US companies to participate.