Spanish oil firm Repsol pulls out of Cuba

Spanish oil firm Repsol has announced that it is pulling out of Cuba after an unsuccessful attempt to find oil off the island earlier this month.

Cuba’s communist government is desperate to revive its sagging economy by exploiting potentially huge oil and gas reserves, but on May 18 Repsol said an exploratory well drilled at a cost of $100 million some 50 kilometers north of the Cuban coast had come up dry, leading chairman Antonio Brufau to tell journalists and investors in Madrid on Tuesday that Repsol “won’t do another” well in Cuba, according to the BBC.

A Repsol spokesman told the BBC that the decision to pull out of Cuba was based on the high cost and risk factor entailed by offshore drilling and the fact that four out of five previous attempts to find oil off the island were unsuccessful.

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According to the Associated Press, Malaysian state oil company Petroliam Nasional Berhad (Petronas), which started drilling last week in an area of the Florida Straits known as the Northbelt Trust, is expected to take over from Repsol in trying to find oil off Cuba’s coast.

Results are expected in July, but a delay in finding oil would hurt Cuba’s attempts to lift its economy through limited free-market reforms under President Raul Castro and could make the Caribbean island nation more dependent on Venezuela, which currently provides $3 billion of subsidized oil each year.

According to the Miami Herald, Repsol’s withdrawal raises the critical question of how offshore oil exploration in Cuba – which began off the island’s northern coast four months ago – can seriously continue when only one platform in the world, Scarabeo-9, can operate there.

The platform was built in Asia with less than 10 percent of US equipment to bypass the trade embargo imposed by Washington on the island half a century ago. 

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