Did Cuba’s Plan to Drill Near Florida Prompt President’s Pivot on Offshore Oil and Gas?

by JACKIE MOREAU on JANUARY 31, 2012

While Republican Party candidates face a political drilling in the Florida primaries, Florida prepares for the offshore drilling by a Spanish company just miles away from its coastline, courtesy of our embargoed neighbor to the South. Cuba has signed lease agreements for offshore drilling blocks with six nations in the North Cuba Basin, a body of water within the Cuban Exclusive Economic Zone (EEZ) that is believed to harbor at least 4.6 billion barrels of crude oil. Five of the six companies are owned by foreign countries: India, Venezuela, Malaysia, Vietnam and Angola. Spanish-based Repsol, the single private company, will drill one exploratory well in the North Cuba Basin, called the Jaguey Prospect, lying about 55 to 60 miles south of Key West, FL. It owns a 40% share in the newest exploratory well, while India’s Oil and Natural Gas Corp. and Norway’s Statoil each hold a 30% stake. Repsol has contracted the Italian-owned Scarabeo-9, a mobile offshore drilling unit (MODU), to drill the Jaguey well.

In March 2010, President Obama introduced a plan for drilling to take place 125 miles from Florida’s Gulf coastline. Only weeks later, the President’s offshore drilling proposal was shelved due to the Deepwater Horizon spill. Since then, the administration has been largely hostile to existing deep water drilling offshore in American waters-first, it imposed a de jure moratorium, and, after that, it imposed a de facto moratorium via bureaucratic foot dragging.

In a surprise move, the President seemed to pivot on offshore drilling policy in last Tuesday’s State of the Union Address. Specifically, he announced a plan to open 75 % of potential offshore oil and gas reserves. Details of the plan are still scarce, so we still don’t know what it entails exactly. One must wonder if the President’s wind of change was prompted by the fact that companies from five nations are drilling for oil and gas in such close proximity to Florida.

Special thanks to Richard Charter