Repsol's Decision Smokes Out Cuba's Oil Ambitions

Rigzone, (Global Insight) ^ | Wednesday, May 30, 2012 | Juliette Kerr

[Rabin]

Repsol, has confirmed that (his) company and its partners are abandoning drilling offshore Cuba, representing a major blow to the island's ambitions to secure oil self-sufficiency.... The decision follows reports that the Jaguey-1 exploration well drilled by Repsol and partners Statoil (Norway) and ONGC (India) on Block N26, in Cuba's Exclusive Economic Zone (EEZ) in the Gulf of Mexico, had come up dry.

[Rabin]

Visions of sugar plums revised to a dry hole off the coast of Cuba, has massive Latin geopolitical and economic repercussions.

Rab.

[tet68]

Sounds like they came up with a dry hole in
Chavez too.

[cpdiii]

The oil is there someplace. Exploration for oil is a numbers game. If you have a “good basin” the oil is there. However, you must drill enough holes in the basin to find it. When a major oil company such as “Stat Oil” of Norway decides to quit exploring a basin they make the decision on a risk benefit calculation.

If they will have a major return on their risks they will keep drilling. If the return on the risks is not great, they will quit drilling.

Bottom line is as follows;

1. The current contract will most likely deny Statoil profit based on current knowledge gained from drilling the recent dry holes.

2. The knowledge gained from drilling indicates the contract will not be profitable if they continue drilling even if they do discover commercial quantities of oil.

[HiTech RedNeck]

Dunno if Statoil has the best oil basin visualization technology... maybe a BP or an Exxon would better be able to site a prospective well. But Cuba can’t make them do it.

[jdsteel]

Maybe they figured out that any equipment they put there would be nationalized one the oul started flowing.