Bloomberg News

Repsol to Let U.S. Check Rig Before Cuba Oil Drilling

October 20, 2011

(Updates with comments about contractors in fourth paragraph.)

Oct. 18 (Bloomberg) -- Repsol YPF SA, Spain’s biggest oil company, will let the U.S. inspect its Scarabeo 9 rig before the ship enters Cuban waters for exploratory drilling in the Gulf of Mexico, a U.S. regulator said.

“It’s no question that we could do a better, more full- value inspection once the rig is on site, but this is a lot better than nothing,” Michael Bromwich, director of the Bureau of Safety and Environmental Enforcement, said during a Senate Energy and Natural Resources Committee hearing in Washington today. “We’re doing everything we possibly can to protect ourselves.”

Cuba has leased tracts 50 miles (80 kilometers) off the Florida coast, raising concerns that drilling may lead to an oil spill that might foul American beaches. The U.S. has limited ability to prevent accidents or intervene during them because it imposed a trade embargo in 1962. The U.S. waters bordering Tampa and the Florida Keys are closed to drilling.

The U.S. asked Repsol, based in Madrid, for more information about the contractors it will use offshore Cuba, and is considering demanding oil-reservoir data Repsol said is confidential, according to Bromwich.

Repsol, which plans to drill off the Cuban coast by the end of the year, is fully cooperating with U.S. authorities, company spokesman Kristian Rix said in a phone interview.

U.S. Cleanup Licenses

The rig is owned by Saipem SpA, based in Milan.

The Commerce Department issued a number of licenses for U.S. oil-spill containment and cleanup companies to use boom, skimmers and dispersants in Cuban waters after an accident, Bromwich said.

The BP Plc well 40 miles off the Louisiana coast that spilled almost 5 million barrels of oil into Gulf waters polluted beaches in Mississippi, Alabama, Texas and Florida. The April 2010 accident also shut a swath of federally controlled fishing grounds over an area the size of Nebraska.

Repsol will follow U.S. regulations when drilling off Cuba’s coast and will report its oil-spill response capabilities to U.S. authorities, Bromwich told lawmakers.

--Editors: Judy Pasternak, Bob Brennan

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net


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