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Posted July 30, 2004 by publisher in Business In Cuba

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Associated Press

The Spanish petrochemicals company Repsol-YPF reported Thursday it found petroleum reservoirs off Cuba’s coast, but the first well was not considered commercially viable - a ruling likely to disappoint many here who had hoped for bigger news.

Repsol Chief Operating Officer Ramon Blanco said during a Thursday conference call in Europe that drilling off the island had found “a petroleum system,” but the first Cuban well was considered “noncommercial.”

“The first well drilled in Cuba has partially met our initial expectations,” Blanco said, according to a report by Dow Jones Newswires. “And at this stage the group is defining future exploration activities in the area.”

Another Repsol executive added during the conference call that it will take nine to 10 months to assess new projects in Cuba and about one year to drill a new well.

Since early June, Repsol had been spending about US$195,000 a day to rent a Norwegian platform for exploratory drilling about 30 kilometers (18 miles) north of the island’s coast in Cuban waters.

The location was identified by studies after Repsol contracted an area for oil exploration from the Cuban government in December 2000.

The project had raised hopes on the communist-run island, which still must import about 50 percent of its petroleum.

Oil specialists believe Cuba’s waters in the Gulf of Mexico could contain large quantities of crude, just as those of Mexico and the United States do. Earlier explorations, however, turned up only modest discoveries.

Cuba was almost wholly dependent on oil imports and imported most of its supply on extremely favorable terms from the former Soviet Union.

But when the Soviet bloc collapsed more than a decade ago, Cuba began producing much of its own oil and gas.

Cuba currently produces 75,000 barrels daily, about half of what it needs. It imports much of the rest on favorable terms from political ally Venezuela.

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