Repsol ‘almost certain’ to pull out from Cuba




In a blow to Cuba’s oil hopes, Repsol SA won’t perform another exploratory drill in Cuban waters after a first drill came up empty, Chairman Antonio Brufau said in a press conference in Madrid May 29.

“I am almost certain we won’t do any more activities” in Cuba, Brufau said in the presentation of the Spanish company’s $24 billion five-year plan, according to Reuters.

In the short term, Cuba has at least two more shots at striking offshore oil. On May 24, the Scarabeo 9 platform began drilling in a block off Pinar del Río province licensed to Malaysian state oil company Petronas. Petronas is the senior partner in a consortium with Russian oil company Gazprom Neft.

Making for three confirmed drills in Cuba by the platform, Venezuelan state oil company PdVSA is next in line, Cuban oil officials said in a statement read on state television June 6, without providing dates.

A Cuban official said last year they expected five exploratory drills within two years.

Repsol has already contracted Scarabeo 9 — the only platform in the world built to comply with U.S. sanctions against Cuba — to perform drills in Brazil.

The results from Repsol’s first exploratory drill by the Scarabeo-9 platform just North of Havana were “negative”, the company confirmed May 18, without providing details. Spokesman Kristian Rix said a week earlier that Repsol was “evaluating the situation.” The company performed the drill in a consortium with India’s ONGC Videsh and Norway’s Statoil.

This was the second time Repsol failed to strike oil in exploratory drilling off Cuba, after a first drill in 2004 did not produce “commercially viable quantities.”

A major offshore oil find is Cuba’s best shot at mid-term relief from its permanent cash crunch. Some pressure has been taken off the Cuban economy thanks to Venezuelan oil supplied at preferential conditions and in barter deals. However, Cuba’s dependence on a friendly Venezuela — which covers half of the island’s oil needs — has been put in the spotlight with President Hugo Chávez’ battle against cancer.

The Spanish company will concentrate its upstream efforts on 10 “key growth” projects that are already under development in Brazil, the U.S., Russia, Spain, Venezuela, Peru, Bolivia and Algeria. At the same time, Repsol will make “selective de-investments in non-strategic assets” worth up to $5.6 billion, the company said in a press release.

In its report, Repsol said the “two most attractive areas in the world” were Brazil and the Gulf of Mexico.

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