A new Chinese built oil rig, the massive Scarabeo 9, is slowly making its way toward Cuba with arrival expected in December. Owned and operated by Italian oil company ENI, it will be used to drill at least three test wells in Cuban waters, two by Repsol in partnership with Norway's Statoil, and another by Malaysia's Petronas with Russia's Gazprom Neft.
Inspectors from the U.S. Coast Guard and Interior Department will board and inspect the rig before it reaches Cuban waters. Repsol has agreed to follow U.S. drilling regulations as it operates in Cuban waters.
Cuba is also negotiating with Brazil oil giant, Petrobras and others, on additional drilling leases. Cuba’s oil minister, Fidel Rivero, recently noted that Petrobras is the “world leader in deep water drilling.” Actually, the U.S. is the world leader. But our embargo sanctions prevent American oil drilling service companies from doing business with Cuba, even to assist with an oil spill.
American drilling companies have sent delegations to Cuba for talks with government officials and with Cupet, the Cuban national oil company.
Tomás Hernández, Cuba’s vice minister of basic industry did indicate a preference to work with the U.S., especially on safe drilling practices. But he told the latest U.S. delegation that Cuba is going ahead with their off shore drilling program, using every reliable non-U.S. source they can for technology.
The US-Cuba 1977 Maritime Agreement divided drilling rights in the narrow Florida Strait which separates the two countries. Cuba has organized its half of the Strait into 59 oil exploration blocs, and has been actively seeking international oil drilling partners. The 1977 Agreement was never ratified by the US Senate, but it has been renewed every two years by U.S. Presidential letter. Senator Bill Nelson, D-FL, has asked President Obama to recall his diplomatic note to Havana which reinforced the 1977 agreement. Nelson reminded Obama of the environmental risks demonstrated by the BP spill.
During the next few years, Americans are likely to observe Cuba licensed drilling platforms within 50 miles of Key West. If oil and gas is discovered, the reservoir could be one that extends under U.S. waters. As oil is pumped up in the Cuban sector, pressure in the reservoir will lower. This will cause oil from beneath adjacent U.S. waters to seep toward the Cuban wells. In property law that situation is usually covered by the Rule of Capture. You capture oil from a well on your property and it’s yours, even if the oil is migrating from under an adjacent property. Slant drilling under a neighbor’s property is normally prohibited as a trespass, whether it is for water or oil.
A scene from the 2007 film, There will Be Blood, illustrates the Rule of Capture. The character Eli asks the oilman, played by Daniel Day-Lewis, to purchase an oil and gas lease on land owned by a member of Eli's church. Day-Lewis, whose land is adjacent, was already extracting the neighbor’s oil. He declined the offer. He explains to Eli: "If you have a milkshake, and I have a milkshake, and I have a long straw, and my straw reaches to you across the room, I drink your milkshake! I drink it up!"
And there are no customs or other barriers beneath the sea bottom.
ROLF WESTGARD, a resident of Deerwood, is a member of the American Association of Petroleum Geologists.