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Russian firm hits another dry Cuban well

07th August 2012

Drilling at latest deepwater well off Cuba bodes bad news for Havana and Gazprom’s overseas expansion

Russian firm hits another dry Cuban well
Gazpromneft is relying on its expansion overseas to reach the output goal of 2 million barrels per day of oil in 2020

Cuba’s latest deepwater exploratory well, co-tested by a major Russian oil company has come up dry, it emerged on Monday. The result comes as a blow both to Moscow – seeking to expand its overseas operations, and to Havana's hopes of petroleum riches.

The news follows Spanish oil firm Repsol announcement in May it will stop looking for oil in Cuba after hitting a dry well drilled at a cost of more than USD 100 million.

Geological testing showed “an active petroleum system that could extend to other parts of the four blocs contracted by PC Gulf and Gazpromneft, and even beyond their limits,” according to a statement by Cuban state oil company, Cubapetróleo

“The rocks are very compact and do not have the capacity to deliver significant quantities of petroleum and gas, so it cannot be qualified as a commercial discovery” it added.

PC Gulf, a subsidiary of Malaysia's Petronas, and the oil arm of Russia’s gas exporter, Gazpromneft conducted drilling operations at the Marina Catoche 1x oil well off the western province of Pinar del Rio. Operations ended 31 July.

Drilling was conducted with the “one-of-a-kind” semisubmersible Scarabeo-9 rig, part of the fleet of the Italian conglomerate Saipem, at a final depth of 4,666m. Scarabeo-9 was key to ensure both firms complied with the stipulations set down by the decades-long US embargo on Cuba, as it boasts less than 10 per cent of US technology.

Both firms will analyse the geological data gathered and assess the potential of the four blocs they have contracted.

The news will be a blow to Gazpromneft, which is relying on its expansion overseas to reach the output goal of 2 million barrels per day of oil in 2020. It is the second foreign venture which has hailed less than positive results for the firm, after it announced disappointing seismic studies off the coast of West Africa.

The dry well has also put a second question mark over the near-term feasibility of Cuba’s dream to strike vast petroleum resources, after another well sunk by Spanish energy firm Repsol came up dry in May. An estimated 5 bn to 9 bn barrels of crude may be buried off Cuba deep below the Gulf of Mexico, according to geologic surveys.

Scarabeo-9 will now pass on to Venezuelan state oil company PDVSA, the next in line for an attempt at oil glory near the island's western tip.

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