Other countries ink deals for oil drilling off Florida Keys


Florida Keys bridge

by  David Goodhue, The Reporter, Tavernier, FL

While the debate about drilling off the coast of Florida continues in Washington and the state Legislature, several international companies are getting started on projects that could bring oil rigs within 60 miles of the Keys by year’s end. 

Companies from nations like Norway, Spain, India, China, Russia and Brazil have signed exploration agreements with Cuba and the Bahamas that could mean drilling south of Key West this year, and 120 miles east of the Keys in the Cay Sal area of the Bahamas in fewer than two years. 
Last week, Cuba’s communist newspaper Granma reported that the country’s state oil company Cubapetroleo, or CUPET, inked a deal Tuesday with Russian company Zarubzhnieft to begin exploring for oil in four of the 59 blocks the island nation divvied up off its coast in the Gulf of Mexico. 

Jorge Pinon, an energy fellow with the University of Miami’s Center for Hemispheric Policy, said the Russian-leased blocks are too small and will be too far west into the Gulf of Mexico to be much of a concern to South Florida. 

But the projects from other countries’ energy companies, particularly from Spain’s Repsol-YPF and Norway’s StatoilHydro, may add a new twist to the ongoing debate about domestic oil and natural gas exploration. 

These companies are major players in the exploration industry, and they wouldn’t be eyeing this area of the Gulf of Mexico and the Caribbean if they weren’t confident their efforts would bear fruit, Pinon said. 

“The argument about continuing the moratorium [of drilling off of much of Florida’s coast] takes a different turn if everyone else is drilling all around us,” Pinon said. 

This has not been lost on proponents of domestic oil and natural gas drilling. 

“Wouldn’t it be ironic if the Russians could drill closer to our shores than American oil and gas companies? The losers would be the American consumers who are cut off from the trillions of dollars in government revenue and thousands of new jobs that could be created if more of America’s oil and natural gas resources could be developed,” Katie Matusic, media relations manager for the oil industry lobbying group American Petroleum Institute, wrote in an e-mail. 

The area from northwestern Cuba to southwestern Bahamas could hold as much as 14 billion barrels equivalent of oil and natural gas, according to the U.S. Geological Survey. 

Repsol drilled a test well about 20 miles off Cuba’s north coast in 2004. Reuters reported that the company said it found traces of high-quality oil, but the crude was not commercially ready yet. A second well was scheduled to be drilled this summer, but has been postponed for unknown reasons. 

Reuters said details of the project are being kept quiet because of opposition from the U.S. government. Pinon said industry insiders are saying the well could still be drilled sometime this year. 

StatoilHydro reached an agreement with BPC Limited to become the operator of three of BPC’s offshore exploration licenses in the Cay Sal area of the Bahamas, the two companies announced in May. The companies did not disclose the amount of money involved in the deal.

StatoilHydro said in a press release that the beginning phase of the agreement is for seismic research only, and drilling may not happen in the first three years of the deal. But Pinon said if Repsol’s second well off Cuba produces results, expect to see the Cay Sal projects to move quicker. 

“I do not believe that exploratory drilling is going to take place in the Bahamas for a year or two, unless the Repsol Cuba exploratory well is successful. Then you will see the Bahamian effort moving swiftly,” Pinon said. 

A spokesman for Sen. Bill Nelson, a Democrat from Florida and an outspoken critic of drilling off the state’s coast, said the senator is “closely monitoring” the Cuban and Bahamian drilling efforts, but he is more concerned about domestic efforts to ease drilling restrictions in the United States. 

“Meanwhile, his more immediate focus is fighting legislation the Senate will take up this fall that would bring drilling rigs as close as 10 miles off Florida,” Nelson press secretary Bryan Gulley said in an e-mail. 

That bill, proposed by Sens. Lisa Murkowski, R-Alaska, and Mary Landrieu, D-La., would void a 2006 law written by Florida’s congressional delegation that put a huge area of federal waters surrounding the state off limits to drilling until 2022.



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