Drilling Off Cuba, and How the Embargo Could be Very Costly for the US

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.

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.

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