Repsol tries to ease US worries about Cuba drilling

Washington, 18 October (Argus) — US regulators will visit the deepwater rig that Spain's Repsol-YPF will use to drill in Cuban waters, as Washington braces for Havana's plans to throw open its portion of the Gulf of Mexico to oil and gas exploration.

US Bureau of Safety and Environmental Enforcement (BSEE) director Michael Bromwich told the Senate Energy and Natural Resources Committee Repsol has promised to “adhere to US regulations and the highest industry standards.”

In their “numerous” communications with Repsol, US officials “have made clear that we expect it to adhere to industry and international environmental, health and safety standards and to have adequate prevention, mitigation and remediation systems in place in the event of an incident,” Bromwich said.

In a bid to ease US concerns, Repsol has voluntarily provided information regarding its drilling plans and its oil spill response.

BSEE and Coast Guard officials will conduct a joint visit to the mobile offshore drilling unit Scarabeo 9 before the rig is moved into Cuban waters.

Given the proximity of the drilling location to US waters, “we have welcomed the opportunity to gather information on the rig's operation, technology and safety equipment,” Bromwich said.

BSEE officials already have observed a “table-top” exercise Repsol conducted in Trinidad to test its readiness to respond to a spill, and the agency has received information about both the drilling rig and the blowout preventer, Bromwich told the panel.

Since most of the contractors that otherwise would service a rig in the Gulf are US companies, Repsol will use its own employees to provide the functions that typically would be done by oil field services contractors, Bromwich said.

Cuba has offered contracts for 59 blocks in the island nation's exclusive zone of 42,243 square miles (112,000km²) in the Gulf. Cuban state-owned energy company Cupet said its Gulf oil fields can yield more than 20bn bl of oil, more than double the 9bn bl estimate of the US Geological Survey.

Repsol is leading a consortium that includes India's ONGC Videsh and Norway's Statoil. The rig was built in China by Italy's Eni offshore drilling unit Saipem.

The rig later will be used by Russia's Gazprom Neft, which recently bought a 30pc stake in Malaysia's state-owned energy company Petronas' four blocks in Cuban waters.

Members of Congress have not been shy about showing their displeasure. Last month, a group of lawmakers from the US House of Representatives sent a letter to Repsol chief executive Antonio Brufau Niubo, warning the company could be “subjecting itself and its affiliates to criminal and civil liability in US courts.”

Repsol has insisted it is in “full compliance with US legislation on the embargo on Cuba” and has “designed its drilling plans in accordance with the most stringent safety legislation.”