This NY Times article reports on Repsol, YPF‘s (Spain’s largest oil comany) hiring of a Norwegian drilling platform at a cost around $200,000 a day to search for oil in a narrow sector of the Gulf of Mexico off the northwestern coast of Cuba. The venture, which was established with the Cuban government-owned oil company CubapetrÛleo, is being watched closely in Houston’s oil and gas community.
If Repsol is successful in making a major find, that would be a boon for Cuba, which imports most of its fuel from Venezuela and struggles economically. It would also shake up the dynamics of oil and gas production in the Gulf of Mexico, which has been dominated for decades by United States companies.
If there is a big oil find in Cuban waters, then that will also be an interesting test of the Bush Administration’s Cuba policy, which has been to maintain and even strengthen sanctions in hopes of isolating and weakening the Communist country’s economy. However, such sanctions might be rethought if Mr. Bush’s supporters in the oil and gas industry are faced with the prospect of sitting on the sidelines while foreign companies develop good oil and gas prospects in Cuban waters.
Stay tuned on this one.