Zarubezhneft abandons offshore drilling in Cuba, for now

Leaving Cuba on June 1: Songa Mercur

CUBA STANDARD — More than one month after the owner of a drilling platform said it would pull its rig from Cuba, state oil company Unión CubaPetróleo (Cupet) announced in a terse official note that Russia’s OAO Zarubezhneft postponed further offshore exploration.

The pullout effectively ends all offshore exploratory drilling in Cuba, for now. The failure by the Songa Mercur shallow-water rig to find oil in Block L, off Cayo Santa María in north-central Cuba, comes after four dry holes drilled by a deep-water platform in Cuban waters of the Gulf of Mexico in 2012. The lack of success, after five foreign oil consortia invested hundreds of millions of dollars in Cuba over the past couple of years, is dashing hopes to resurrect the cash-starved Cuban economy with oil.

To be sure, Zarubezhneft plans to resume drilling in Cuba in 2014, according to Cupet.

“Taking into consideration the geological complications that came about, it was agreed to modify the original drilling program, by adding a second stage that is expected to begin in 2014, ” Cupet, which partnered with the Russian company, said in the note, after meeting in Havana May 30 with a Zarubezhneft delegation led by sub-director Sergey I. Erke.

When the Songa Mercur started drilling in December 2012, it was scheduled to remain under contract by the Russian state company in Cuba for 325 days. Then, in early April, the owners — Norway’s Songa Offshore AS — said in a fleet report that the rig will leave Cuban waters June 1, after barely 180 days, to be redeployed to Asia.

The Songa report said that the platform was idled in early April, due to technical problems with a crucial safety device. “The rig is currently in process of pulling its [blowout preventer] for evaluation of shear ram malfunctions and technical inspection of connector bolts in accordance with manufacturers’ instructions,” the April 4 report said. In March, the Songa Mercur achieved an operating efficiency of 99 percent in its drill for Zarubezhneft, the report said.

There are “concerns in Cuba that [Zarubezhneft] won’t have time” to drill deep enough by the pullout deadline in June, Simon Potter, a British oil executive, whose Bahamas Petroleum Co. plans to drill just 12 miles north of Songa Mercur’s location, told Bloomberg News April 18. Zarubezhneft officials did not respond to inquiries from Cuba Standard.

Zarubezhneft last year expected to spend close to $126 million on near-shore exploration off north-central Cuba. The Russian state company chartered the semi-submersible to drill in Block L, the easternmost of four blocks the company leased in 2009. Block L is located off the keys of Villa Clara province, near Cayo Santa María, a new beach tourism destination Cuba has been developing over the past 10 years.

Zarubezhneft blocks in Cuba: Return to drilling in 2014?
You May Also Like