Strike Two For Cuba And Gulf Of Mexico Oil

The latest deep-water drilling operation off the West Coast of Cuba has been called off. The exploratory well by PC Gulf, a subsidiary of Malaysia’ Petronas and Gazpomneft of Russia, has been declared not commercially viable.  In May, Repsol’s said their drilling in this field was a failure.

Cuba, as noted in the previous report about this potential oil field, badly needs the money that they hope to obtain from this drilling.  They are also worried about the fate of Hugo Chavez of Venezuela, as he has been supplying Cuba with below market priced crude.  If he dies or is deposed, it could be a real problem for Cuba.

Some estimates of the crude in the field being explored are as high as 9 billion barrels. The field is in ultra deepwater.  Ultra deepwater is defined as where the seafloor at the drilling site is 5000 ft (1524 m) or more below the sea surface. The PC Gulf well was drilled to 15,300 feet below the seafloor.  The lease cost for a platform to accomplish the drilling is about $500,000 per day according to a report by the Associated Press.  There is only one such unit now available for the Cuban drilling and it will be used by the next company to try their luck—-the Venezuelan state oil company PDVSA.


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