Bahamian-flagged and DNV-classed, Scarabeo 9 is a semi-submersible drilling vessel built by Yantai Raffles. It is on contract by Repsol YPF for deepwater exploratory drilling off Cuba.

The Scarabeo 9, on contract for Repsol, is currently sitting at, or very close to, “TD” or total depth on the first deepwater well ever drilled off Cuban shores. So far, things have seemingly gone off without a hitch, a few mechanical issues here and there, but nothing atypical for a new rig, and no environmental impacts.

But what if a catastrophic blowout occurs?

This was the subject of last week’s panel discussion at the Carnegie Center for International Policy in Washington, DC.

“There is no standing agreement with Cuba on what to do in case of a blowout,” says Wayne Smith, a senior fellow at the Center for International Policy and director of the Cuba Project.

Nobody is predicting a catastrophe, the panel reiterated, and reports indicate that Cuban drillers on board the Scarabeo 9 are being exceedingly cautious, but there’s no substitute for being prepared in case disaster strikes.

Helix ESG's Capping Stack loadout, image courtesy Helix

Prior to commencing drilling operations, Repsol contracted Helix Energy Solutions Group to provide immediate well intervention and other subsea services in case of well issues.

It’s a great start, and Helix certainly proved their capabilities during the 2010 Macondo well blowout and oil spill, however Cuba is under a full economic and diplomatic embargo with massive implications.

This means:

1) The Scarabeo 9’s blowout preventer, the most crucial piece of well control equipment on board the rig was made by a US company.  The trade embargo prohibits OEM spare parts or repair items to be sold to Repsol.  Also, technical expertise from the OEM cannot be provided.

2) The “capping stacks” which have been created by Helix ESG, BP, the MWCC and others, are not authorized for use in Cuban waters.  This means, if an uncontrolled blowout does occur, these essential piece of equipment will not be available until authorization is given and a delivery method determined.

This is a significant issue considering the BP “capping stack” weighs somewhere around a half million pounds.  Reports indicate there are no cranes in Cuba capable of lifting such a piece of gear that massive on to a ship.

3) The deepwater drilling experts in the US are not authorized to provide assistance to Cuba in case of a disaster.

4) All the training programs that have been developed post-Macondo are not available for Cuban nationals.  In fact, any training that will result in a professional license or certification is off limits to Cubans.

5) Tyvek suits, the essential work-wear for HAZMAT cleanup, are not authorized to be brought into Cuba due to supposed military applications.

In addition…

The Scarabeo 9 was classed by DNV on 19 August 2011 in Singapore, and she is due for her 1-year “checkup” on 19 August 2012, with a 3 month window on either side of that date.  As expected, DNV has told us that there will be no US-based employees involved.

What sort of legal, or commercial implications might DNV face when they actually DO send someone to inspect the Scarabeo 9?

We asked the Bahamian registry, which is the flag state for the rig, the same question about a week ago and received no response.  I spoke with DNV today and they are still researching the matter.

In short however, Cuba’s access to containment systems, offshore technology, and spill response equipment is severely restricted by the US embargo, yet if a disaster occurs offshore, not only will Cuban ecosystems be severely impacted, but those of the Florida Keys, and US East Coast.

If disaster strikes offshore Cuba, US citizens will have nobody else to blame except the US Government because outdated policies are impacting the ability to prepare sufficiently for real-life environmental threats.  Considering Cuba waters are home to the highest concentration of biodiversity in the region and is a spawning ground for fish populations that migrate north into US waters, a Cuban oil spill could inflict unprecedented environmental devastation if not planned for in advance.

Panelists included Wayne Smith, senior fellow at the Center for International Policy and Director of the Cuba Project; William Reilly, co-chairman of the National Commission on the BP Deepwater Horizon Spill and Offshore Drilling; Dr. Lee Hunt, former IADC President; Robert Muse, Washington, DC-based lawyer specializing in Cuba; Dan Whittle – Cuba Program Director for the Environmental Defense Fund; and Jonathan Benjamin-Alvarado, Professor of Political Science at the University of Nebraska at Omaha.

Petrobas' P-57 platform. Photo: Petrobas

RIO DE JANEIRO (Dow Jones)–The Brazilian Navy confirmed Thursday that an oil slick has been spotted off the coast of Espirito Santo state, with a team still on site trying to determine the source of the oil, a spokeswoman told Dow Jones Newswires.

“Yes, there was an oil leak,” the Navy spokeswoman said. “Espirito Santo port officials have sent a team to the area to verify what happened.” The Navy expects to give more details about the incident later Thursday, when the team returns to shore, the spokeswoman said.

Petrobras did not immediately respond to requests for comment.

Thursday’s spill is the latest in a series of incidents to hit Brazil’s offshore oil industry since a November leak at the Frade field operated by U.S. oil major Chevron Corp. (CVX). A drilling accident caused an estimated 2,400 to 3,000 barrels of crude to seep into the Atlantic Ocean from cracks in the seabed. Production at the field was shuttered in March, when separate seeps were discovered in a nearby area.

The latest slick was discovered close to the P-57 platform operated by state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras. The P-57 platform, which was installed last year, pumps oil from the Jubarte field, which is part of a larger oil-producing area known as the Whales Park because the fields are all named after different types of whales.

-By Jeff Fick, Dow Jones Newswires

Copyright © 2012 Dow Jones & Company, Inc.

Video: Petrobas’ P-57, a super FPSO-type platform

Click here to view the embedded video.

Boom is placed around a salvaged container ship after an oil leak is discovered on the south branch of the Elizabeth River, Wednesday, Oct. 6, 2010. (U.S. Coast Guard photo)

A Virginia ship scrapping company and two of its owners have plead guilty to various environmental crimes stemming from their activities in the ship scrapping business.

According to court documents, Steven Avery, 56, of Bohannon, VA, and Billy Avery, 81, of Virginia Beach, VA, operated Sea Solutions, Inc., a VA-based ship scrapping business, and in February 2010 purchased the vessel M/V Snow Bird for the purpose of scrapping with the knowledge that it contained a quantity of petroleum products and other pollutants.   Despite knowing that these waste products were onboard the vessel and needed to be removed, the men commenced scrapping operations with the pollutants onboard.  Over the course of several months, witnesses complained of pollutants emanating from the M/V Snow Bird and finally, in October of 2010, the defendants caused a major spill of oil, oily water, and other pollutants from the operation into the Elizabeth River.  The cleanup operation removed several thousand gallons of oily waste from the Elizabeth River and the shoreline at the cost to the United States of over $66,000.

“America’s waterways must be protected from companies that look to cut corners by discharging oily waste water illegally,” said David G. McLeod, Jr., Special Agent in Charge of the Environmental Protection Agency’s (EPA) criminal enforcement program in Virginia.  “Improper waste disposal endangers not only the environment but human health.  EPA is committed to making sure criminal violations of environmental laws are not tolerated.”

Steven and Billy Avery each face a minimum 30 days and a maximum of 1 year in prison and, through Sea Solutions, Inc., could be forced to pay a fine of up to a $500,000 and five years of probation.  The sentencing will take place on July 12, 2012.

Shell yesterday was quick to respond after observing a rainbow sheen about 10 miles in length near their Mars and Ursa Platforms located in Mississippi Canyon Block 807 about 130 miles southeast of New Orleans.  After notifying the National Response Center, Shell dispatched one of MSRC’s spill response vessels, the Louisiana Responder, equipped with skimming and boom capabilities to assist with possible cleanup, and requested overflights to conduct aerial surveillance.

Working with the U.S. Coast Guard and the BSEE, Shell inspected the nearby platforms and deployed two ROV’s to inspect local infrastructure as well as search for potential naturally occurring seeps.

Fortunately for all in the end nothing was found and the “orphan sheen” was likely the result of natural seepage, but crews remain on scene to monitor the situation.

In a statement Shell estimated the spill to be six barrels of oil and says it has started to break up and dissipate:

We remain very confident that the sheen did not originate from Shell operations.

It is well studied and documented, most recently by BSEE, that the Gulf of Mexico has a long history of natural occurring seeps, which can on occasion produce sheens.  Shell’s subsea surveillance today and tomorrow will continue to determine if there is a connection between natural seeps and this orphan sheen. – Shell

The oil spill response vessel, Louisiana Responder. Photo (c) Valery Balalaev via Marinetraffic.com

WASHINGTON (Dow Jones)–Royal Dutch Shell (RDSA, RDSA.LN) is reporting a “light sheen” in the central portion of the Gulf of Mexico but says it has no “current indication” that oil is coming from nearby wells.

Shell says it has dispatched an oil-spill response vessel to the location, between the Mars and Ursa production areas, and has requested flights to monitor the one-by-10-mile sheen with aerial surveillance. Shell has no indication what the sheen may be comprised of, company spokeswoman Shell spokeswoman Kelly op de Weegh said.

“The source and type of sheen is currently unknown,” said op de Weegh.

Shell facilities in the Gulf of Mexico include platforms in the Mars and Ursa areas, both of which are about 130 miles southeast of New Orleans, according to the company’s website. The oil and natural gas produced in the fields are transported to shore via pipelines.

Shell says it notified the National Response Center Wednesday and is acting out of “prudent caution.”

Lt. Matt Kor of U.S. Coast Guard District 8, based in New Orleans, told Dow Jones Newswires that the district wasn’t yet aware of the sheen. “We haven’t seen any reports coming across the board,” Kor said.

Shell said the oil-spill response vessel it dispatched, the Louisiana Responder, is equipped with skimming and boom capabilities.

“Shell’s priority is to respond proactively, safely and in close coordination with the regulatory agencies,” the company said in a statement.

Nearly two years ago, a drilling rig known as the Deepwater Horizon exploded in the Gulf of Mexico, unleashing the worst offshore oil spill in U.S. history.

-By Tennille Tracy and Ben Lefebvre, Dow Jones Newswires

Copyright © 2012 Dow Jones & Company, Inc.

OSG's Overseas Beryl. Photo (c) Knut Helge Schistad via Shipspotting.com

The Coast Guard, along with the Louisiana Department of Envrionmental Quality and Plaquemines Parish, said it responded to a fuel oil spill late Monday and into Tuesday on the lower Mississippi River near mile marker 84, approximately 10 miles downriver from New Orleans.

The Coast Guard received notification at approximately 10:08 p.m. Monday night that the 803-foot tanker Overseas Beryl was discharging No. 6 heavy fuel oil into the Mississippi River following vessel refueling operations at Nine Mile Anchorage.

A pollution response team from CG Sector New Orleans arrived at the vessel and discovered fuel oil discharging from a ballast water overboard discharge pipe and into the water. The Coast Guard says the pipe was plugged at approximately 4 a.m., which stopped the flow of oil.

Overseas Shipholding Group, Inc., who owns and operates the 94,799 dwt Overseas Beryl, is responsible for the cleanup and has reportedly contracted the Marine Spill Response Corporation to head the spill response and O’Brien’s Response Managements as the spill management team.

According to the Coast Guard statement released earlier today, two skimming vessels, response boats and personnel from U.S. Environmental Services, Clean Gulf Associates and MSRC were on scene as of this morning and crews have deploying boom to protect sensitive areas.  The USCG also says that responders have installed protective boom at Plaquemines Parish water intakes, and the parish has secured the intakes as a precautionary measure.

The Coast Guard issued a safety marine information broadcast to mariners however the portion of the Mississippi remains open.

“We’re still assessing the amount of oil spilled and potential impacts, but we’re responding aggressively in an effort to minimize impacts along the Mississippi River,” said Capt. Pete Gautier, the Coast Guard Federal On-Scene Coordinator.

There are currently no injuries or impacts to wildlife reported and the Coast Guard is investigating the cause of the incident.

The Coast Guard in New Orleans was notified at 1:43 p.m CDT on Monday that Louisiana sweet crude oil was discharged from Gulf Production Company, Inc.’s Raphael Pass production facility in Louisiana, the agency said in a press release. “The discharge was reportedly due to the failure of a three-phase high-pressure separator coming from [Exxon Mobil Corp.'s (XOM)] well to the facility,” the agency said.

The Coast Guard said Gulf Production Company is the responsible party, which has contracted ES&H as the oil spill response organization. The well has been manually shut in, the agency added.

An overflight conducted Tuesday by the Coast Guard and ES&H showed that most of the discharge was contained inside the north end of Bull Bay in front of the facility, the agency said.

The Coast Guard said it’s investigating the cause of the incident and that it continues to oversee the clean-up operations.

No injuries were reported.

-By Isabel Ordonez, Dow Jones Newswires

The Clarence W. Settoon Photo: CaptDag via Shipspotting.com

A portion of the Mississippi was closed Friday morning after two barges collided causing an oil spill about 50 miles upriver from New Orleans.

The Coast Guard said it was notified at approximately 1:58 a.m. that a construction barge, towed by the tug Alydar, and a tank barge, towed by the motor vessel Clarence W. Settoon, collided causing a 10-foot b 5-foot gash in the tank barge above the waterline.

The tank barge was loaded with 3,535 barrels, or about 148,470 gallons, of Louisiana sweet crude oil at the time of impact and an undetermined amount of oil was released into the lower Mississippi River.  The Coast Guard did add that the amount of oil released is estimated to be substantially less than the total of the tank’s contents.

“We are aggressively responding to this incident and have deployed pollution investigators from Sector New Orleans and an MH-65 Dolphin helicopter and crew from Coast Guard Air Station New Orleans to assess the situation,” said Coast Guard Captain of the Port New Orleans, Capt. Pete Gautier. “We are working quickly and efficiently with our local and state partners to clean up product in the water and protect the maritime ecosystem and natural resources that are important to our national economy and essential to the livlihood and way of life for coastal communities.”

A section of the lower Mississippi River near LaPlace was closed after the collision but was partially reopened at 11 a.m. CST to southbound traffic. For northbound vessels, the section will be open 6:00 p.m. CST Friday to 4 a.m. CST Saturday, while southbound traffic is stopped.

No injuries were reported.

The Clarence W. Settoon is owned and operated by Settoon Towing of Louisiana

Photo: PETROBRAS NEWS AGENCY

RIO DE JANEIRO (Dow Jones)–Brazil’s lead environmental regulators said late Wednesday that state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, could be sanctioned for an oil spill at a deep-water field.

The Brazilian Institute for the Environment and Renewable Resources, or Ibama, said it had given Petrobras five days to submit a report on its response to the accident, including details on actions required under the emergency plan that was part of the environmental license for the field. Some 160 barrels of oil leaked at the Carioca Nordeste field after a tube carrying crude to the surface ruptured.

“Depending on the information to be presented, the company could receive sanctions,” Ibama said in the statement.

Petrobras was conducting a long-term well test at the Carioca Nordeste field when the accident took place. Ibama said there was no danger of the spilled oil reaching the coast, given the distance to the coast and current ocean conditions. The field sits more than 300 kilometers off the coast in an area known as the Santos Basin, where a cluster of oil discoveries were made that are estimated to hold 50 billion barrels of crude.

–By Jeff Fick, Dow Jones Newswires

Dynamic Producer, image (c) N. Castro

RIO DE JANEIRO (Dow Jones)–Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said Tuesday that an accident at an ultra-deepwater oil field off Brazil’s coast spilled an estimated 160 barrels of crude into the Atlantic Ocean.

It’s another setback for Brazil’s oil industry, which is gearing up to exploit massive discoveries in some of the most challenging environmental conditions on earth. Industry executives will also be keen to see the official response, given the heavy-handed response to an earlier problem in November at a field operated by Chevron Corp. (CVX).

The latest spill happened at the Carioca Nordeste field, part of a cluster of oil discoveries made more than four miles deep off the coast of Brazil’s Rio de Janeiro and Sao Paulo states. Safety systems aboard the “Dynamic Producer” FPSO, a floating production, storage and offloading vessel conducting a long-duration test, detected the rupture at 0830 local time on Tuesday, Petrobras said.

The safety systems automatically shut down the well, which remains closed and in safe condition, Petrobras said. An investigation into the incident is already under way, the company said.

Brazil’s oil regulator ANP said late Tuesday it designated a team that will start inspecting the ruptured production column on Wednesday. The pre-salt well linked to the column has been closed, containing any leakage, ANP confirmed in a statement.

The oil spilt is unlikely to reach the Sao Paulo coast 250 kilometers away, ANP said, adding that efforts are under way to contain the oil slick.

The accident was reported to oil regulators, Brazil’s Navy and environmental authorities, Petrobras said. The company has already mobilized “all of the resources necessary to collect oil from the sea and residual oil from the upper part of the column.”

In November, some 2,400 to 3,000 barrels of crude spilled into the Atlantic after a problem at Chevron’s Frade field in the Campos Basin. Chevron was heavily criticized by regulators and government officials, and criminal charges may be leveled against company executives. Environmental regulators have already imposed fines of more than $30 million, while a state prosecutor has filed a lawsuit seeking damages in excess of $10 billion from Chevron, its Brazilian unit and rig operator Transocean.

Chevron was also barred from drilling offshore Brazil, although the company continues to produce oil from the Frade field.

Last week, Petrobras’s Transpetro logistics unit also was forced to clean up a beach in southern Brazil after 7.5 barrels of oil spilled during offloading of a tanker ship at a single buoy. Brazil’s National Petroleum Agency, or ANP, is investigating the spill.

Petrobras shares closed trading stable at BRL24.57 on the Sao Paulo stock exchange.

-By Jeff Fick, Dow Jones Newswires, Diana Kinch contributed to this article