Saturday, November 17, 2012

Russian oil company to invest $126m in offshore exploration

Russian oil company to invest $126m in offshore exploration

Russian state oil company Zarubezhneft will spend close to $126 million
on near-shore exploration off north-central Cuba that will begin in
December, a Russian official said during a visit to the island.

The Songa Mercur, a Soviet-built and Norwegian-owned semi-submersible,
arrived Nov. 15 in Cuban waters, Russian Comptroller Sergei Stepashin
confirmed. According to Russian news service, a delegation of
Russian and Cuban officials visited the platform Thursday, after it
arrived in Cuban waters from Trinidad & Tobago. The group included
Stepashin, Zarubezhneft CEO Nikolay Brunich, and Russia's ambassador to
Havana, Mikhail Kamyshin.

Zarubezhneft chartered the semi-submersible for 325 days to drill in
Block L, the easternmost of four blocks the company leased in 2009.
Block L is located off the keys of Villa Clara province, near Cayo Santa
María, a new beach tourism destination Cuba has been developing over the
past 10 years.

The first exploration results, according to Stepashin, will be announced
in May.

"It's an important investment, but it's an investment in the future,"
Stepashin said, according to RIA Novosti, before meeting with Raúl
Castro. Both expressed confidence, according to the Russian news service.

"We hope that in a fourth intent, following three failed ones, we will
see 'big oil'," the Russian official said, referring to exploratory
drilling this year by the Scarabeo 9 platform. "This would be of
enormous help to the Cuban economy and a step ahead in our relations, as
well as a response to the defenders of the [U.S. embargo]."

Zarubezhneft's confidence is based on prospecting done by the Soviet
predecessor company, he said.

The Songa Mercur is owned by Oslo-based Songa Offshore AS. The
shallow-water rig, built in in a Soviet shipyard 1989 and updated in
Galveston, Texas, in 2007, can drill in depths of up to 1,200 feet. In
contrast, the Scarabeo 9 platform, used by Repsol, Petronas and PdVSA in
Cuba, can drill in depths up to 12,000 feet; the Scarabeo was
custom-built in China and Singapore with minimal U.S. content, to comply
with U.S. sanctions.

Zarubezhneft subsidiary JSC RMNTK Nefteotdacha has also begun onshore
prospecting in the Boca de Jaruco area near Havana and expects to begin
drilling in March or April. Last year, the Russian oil company signed an
agreement with CubaPetróleo about the use of experimental technology to
maximize production in the mature oil field. If the technology is
successful, Zarubezhneft and CubaPetróleo will expand their cooperation.

Before the visit to the oil rig, Stepashin and Cuban officials signed
anti-corruption agreements in Havana that include training and
professional enhancement courses for Cuban auditors.

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