http://www.miamiherald.com/2011/12/12/2543744/oil-drilling-off-cuba-prompts.html

Posted on Monday, 12.12.11

Officials from Caribbean countries, including the U.S. and Cuba, met to discuss plans in case a disaster happens at an oil rig off Cuba’s coast.

BY ERIKA BOLSTAD
MCCLATCHY NEWS SERVICE
WASHINGTON — As Cuba embarks on a new round of exploratory offshore drilling, U.S. officials are slightly more enlightened about the island nation’s plans in the event of a catastrophic oil spill on the scale of last year’s Deepwater Horizon explosion.

Several Caribbean countries, including the United States and Cuba, met last week in the Bahamas to talk about response plans. U.S. officials got an opportunity to see the Cuban disaster response plans – they’ve already participated in a mock response drill in Trinidad with the Spanish oil company that’s doing the first round of drilling. That company, Repsol, also agreed to allow U.S. inspectors from the Interior Department to take a look at the rig that will be doing the drilling.

‘INEVITABLE’

Sarah Stephens, the executive director of the Center for Democracy in the Americas, said she was encouraged that Cuban and American officials met, along with other nations that have an interest in regional oil production.

“There should be a lot more direct conversation and collaboration between the U.S., Cuba and others about the rig, because it’s inevitable,” she said.

U.S. officials say their priority is mitigating any potential threat to the United States and its territorial waters from oil drilling in Cuban waters. But they also say they’ve done nothing to facilitate oil drilling in Cuban waters, and that their main goal is to be prepared for the possibility of an oil spill and how they would respond.

“The United States will continue to engage multilaterally to advance regional collaboration and to ensure responsible stewardship of the Gulf of Mexico and the Caribbean Sea,” the State Department said in a statement issued before the meeting in the Bahamas.

Although U.S. officials say they’re not actively working to keep Cubans from drilling in their own waters, the embargo that’s been in place since the 1960s may have caused delays.

CUSTOM-BUILT

Repsol had to find an oil rig made from fewer than 10 percent U.S. components – not an easy task. Although few rigs are U.S.-made, many components – including software and blowout preventers – are made in the United States.

The rig, owned by a subsidiary of the Italian oil company Eni, will go next to state-owned oil companies: Petronas, a Malaysian company, and ONGC, an Indian state-owned company that will be partnering with the Russian state-owned company Gazprom.

“That rig was custom built to be sure that it met the embargo limitations,” said Jorge Piñon, a former Amoco executive and a visiting research fellow with Florida International University’s Latin American and Caribbean Center’s Cuban Research Institute. “That’s why it’s taking so long, over the last three years, for international oil companies to be able to drill in Cuba.”

Piñon and other experts in Cuba’s drilling and regulatory abilities remain concerned that the U.S. government hasn’t spoken with the other oil giants that will be leasing the rig after Repsol – all state-owned companies.

“Politics have exceeded common sense in protecting the environment and economy of Florida,” Piñon said.

The U.S. doesn’t have the same leverage with the other state-owned oil companies next in line, however, Interior Department officials told Congress in October. But because it’s a public company and because of its other extensive U.S. interests, Repsol is likely to exercise caution in a prospect less than 100 miles from the Florida coastline.
Read more: http://www.miamiherald.com/2011/12/12/2543744/oil-drilling-off-cuba-prompts.html#ixzz1gNMKhJhN

Special thanks to Richard Charter

http://www.firstcoastnews.com/news/florida/article/230989/4/Florida-Bill-Drill-in-Old-Wells

3:55 PM, Dec 13, 2011
Associated Press

FORT MYERS, Fla. — A bill sponsored by a Naples state representative would give a tax break to companies that go back to drill in abandoned oil wells or drill new wells in fields that are more than 30 years old.

Rep. Matt Hudson, R-Naples, said his bill seeks to boost production, revenue and jobs for the state. The bill targets oil fields in Southwest Florida and the Panhandle.

“What we do is create a new category of oil called mature oil, and in doing so we allow for rejuvenation of wells that were previously capped,” as well as new wells drilled in “mature” fields, Hudson said.

Instead of exploring elsewhere, companies can go to fields where they know oil exists, he said.

The remaining oil is harder to extract, so the tax break would save companies money by helping offset the drilling cost.

House Bill 87 would apply to oil fields that were discovered before 1981 and wells that would begin producing oil after July 1, 2012.

That would include fields in which all wells are abandoned or plugged; fields that have some active and abandoned or plugged wells; and fields where new wells are being drilled, as long as all the fields were discovered before 1981, Hudson said.

The bill cleared its first hurdle Tuesday with a 10-4 approval by the House Energy & Utilities Subcommittee.

The bill has been forwarded to the Finance and Tax Committee.

One of the bill’s dissenters, Rep. Jeff Clemens, D-Lake Worth, said he had questions about where the abandoned wells are and the potential environmental effects of tapping them.

Florida has long had oil production in parts of Southwest Florida and in the northwest Panhandle.

The first field was discovered about 12 miles south of Immokalee in 1943.

A House staff analysis said the Panhandle fields produced about 1 million barrels of oil in 2010, while the Southwest Florida fields produced about 775,000 barrels.

The scope of the bill means a field such as Raccoon Point in the Big Cypress National Preserve, with mineral rights owned by Collier Resources, would fall under its umbrella.
Raccoon Point has 13 wells, eight active. The field, which is in Collier County, was discovered in 1978. Five new wells have been drilled there since February.

The company, run by descendants of Naples founder Barron Collier, plans to expand drilling.

Collier Resources released this statement through a spokeswoman, Andrea McLendon: “While we have not been following state Rep. Matt Hudson’s proposal, HB 87, we do believe that additional onshore drilling in Florida can provide many benefits including new jobs.

Oil drilling in Southwest Florida, ongoing for over 60 years, has proven to be an economic advantage generating tax revenues and creating jobs all in an environmentally sensitive manner.”

The proposed bill would help future drilling become more profitable for companies such as Collier Resources by lowering severance taxes paid per barrel of oil, which is typically 8 percent.

The severance tax is essentially a tax for severing, or extracting, oil or other minerals from the ground, said David Mica, executive director of the Florida Petroleum Council.

The bill would offer varying severance tax rates for producing “mature” oil: * 1 percent on the value of oil that is $60 and below per barrel. * 7 percent on the value between $60 and $80 per barrel. * 9 percent on the value per barrel of $80 and above. If the bill encourages companies to go back into fields that are plugged and recover more oil through new technological methods like directional, or horizontal drilling, “the purpose of the bill is quite frankly laudable,” said Andrew McElwaine, president and CEO of the Southwest Florida Conservancy in Naples. But drilling, particularly in the Big Cypress, is expanding, he said.

If companies are going to pay less taxes for drilling in existing fields where they were planning to drill anyway, “that strikes me as less laudable,” McElwaine said. “We’re not going to allow people to have a windfall profit from this,” Hudson said. He pointed out that under the bill, companies would pay 9 percent on the value of oil $80 and above per barrel, instead of the typical 8 percent. The bill would benefit residents of the state, Mica said. “If you don’t do anything,” he said, “you won’t produce any additional jobs, any additional oil or any additional revenue.”

There are an estimated 370 million more barrels of undiscovered oil in South Florida, according to the most recent United States Geological Survey oil reserve estimate.

All of South Florida’s oil fields are in the Sunniland Trend, an oil reserve about 150 miles long and 20 miles wide, stretching from Fort Myers to Miami.

The trend has 14 oil fields. Six have all wells plugged or abandoned, according to state Bureau of Mining and Minerals Regulation 2010 statistics.

They are: Baxter Island, 40 Mile Bend, Pepper Hammock, Seminole, Sunoco-Felda and Townsend Canal.

All of those, except for Townsend Canal, are in the Big Cypress and were discovered pre-1981.

A 2008 federal Department of the Interior study gives this forecast for oil expansion in the state over the next 10 years: “It can be expected that there is a significant potential for new drilling and development in the state of Florida. It can further be expected that new drilling will be located near existing oil and gas fields.”

Associated Press
Special thanks to Richard Charter

http://www.chicagotribune.com/business/breaking/chi-bp-says-halliburton-destroyed-gulf-spill-evidence-20111206,0,3412921.story

6:36 a.m. CST, December 6, 2011

BP accused Halliburton Co. of destroying evidence that the oilfield services company did inadequate cement work on the Gulf of Mexico oil well that blew out last year, and asked a federal judge to punish Halliburton.

The accusation, in a BP court filing, raises the stakes ahead of a trial, expected in late February, to assign blame and damages for the April 2010 blowout of the Macondo well, which triggered the largest offshore oil spill in U.S. history.

Citing recent depositions and Halliburton’s own documents, BP said Halliburton “intentionally” destroyed the results of slurry testing for the well, in part to “eliminate any risk that this evidence would be used against it at trial.”

The oil company also said Halliburton appeared to have lost computer evidence showing how the cement performed, with Halliburton maintaining that the information is simply “gone.”

BP asked U.S. District Judge Carl Barbier in New Orleans, who oversees spill litigation, to sanction Halliburton by ruling that Halliburton’s slurry design was “unstable,” a finding of fact that could be used at trial.

It also asked Barbier to direct that forensic experts be hired to find the missing computer data.

“These remedies are amply warranted in law and by principles of fair play, and they are essential to ensure this court’s trial is not tainted by Halliburton’s misconduct,” BP said in the filing.

Halliburton is the world’s second-largest oilfield services provider. A spokeswoman, Beverly Blohm Stafford, said the Houston-based company is reviewing BP’s filing.

“We believe that the conclusion that BP is asking the court to draw is without merit and we look forward to contesting their motion in court,” she said.

The Deepwater Horizon drilling rig’s explosion on April 20, 2010, caused 11 deaths, and brought tens of billions of dollars of lawsuits. Halliburton has accused BP of fraud and defamation, among other claims.

BP has also sued Transocean Ltd, which owned the rig, and Cameron International Corp, which made a blowout preventer.

In October, Anadarko Petroleum Corp, which owned 25 percent of the well, agreed to pay BP $4 billion toward clean-up costs and victims compensation.

BP has also reached settlements with Mitsui & Co, whose MOEX Offshore 2007 LLC venture was a drilling partner, and Weatherford International Ltd, which provided equipment used in the well.

The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

Special thanks to Richard Charter

http://www.orlandosentinel.com/news/politics/fl-bahamas-oil-drilling-cuba-waters-20111204,0,2907728.story
By William E. Gibson, Washington Bureau
December 4, 2011

WASHINGTON – Just as South Florida braces for oil drilling set to begin next month off the shores of Cuba, a Bahamian company is pressing to dig exploratory wells as early as next year less than 200 miles from the state’s delicate coastline.
The Bahamian plans could eventually bring rigs as close as 40 miles from Port Everglades.

The prospect of energy exploration off both Cuba and the Bahamas has broadened concerns that widespread drilling will lead to a major oil spill that pollutes the East Coast, fouling beaches, damaging reefs and endangering wildlife.
“If an oil slick gets into the Gulf Stream, it would be carried north, not only along the coast of Florida but farther north into the Middle Atlantic states,” warned former Florida Sen. Bob Graham, co-chairman of a commission that investigated the BP oil spill in the Gulf of Mexico in 2010. “The main concern for the United States would be, in the event of an accident, what capability would the Bahamas have to contain the consequences?”

Seismic testing has convinced the Bahamas Petroleum Co. that more than a billion barrels worth of oil may be found below waters south of Andros Island, the likely site of a first exploratory well.

“Geologically, it’s very exciting,” said Paul Gucwa, chief operating officer of Bahamas Petroleum, which has contacted larger companies in search of a partner to conduct the drilling.

“We will begin our exploration as soon as the Bahamian government puts the necessary regulations in place,” Gucwa said. “They are moving forward to put those regulations in place. We are moving forward to be ready to drill next year.”

When asked about the environmental impact, Gucwa said, “This is very close to Cuba. It would not be any different to the environment than the wells that are being drilled [in Cuban waters].”

The Bahamas and Cuba agreed in October, after 13 years of negotiation, to define and “delimit” their maritime border. The agreement fosters cooperation on trade, shipping and environmental protection. It also clears the way for the two countries to form a joint venture to tap oil reserves along that border and divide the proceeds.

But the Bahamian government – mindful of the Gulf disaster and a recent spill off the coast of Brazil – has blocked offshore production while reviewing its energy regulations and mulling the environmental impact.

The government has granted licenses for potential oil production in Bahamian waters east of Port Everglades and farther south along its maritime border with Cuba. The temporary ban, however, has blocked test wells in those areas.

“They have put on the brakes but not turned off the engine,” said Jorge Piñón, a former oil executive and energy expert at Florida International University, who has consulted with leaders in Cuba, the Bahamas and the U.S. government. “After Deepwater Horizon, they want to make sure their regulations are updated before they lift the ban. I think the [parliamentary] elections in the Bahamas in May will set the direction on this.”

The Bahamas, much like Florida, is conflicted: It wants to protect its ecosystem and tourism but is tempted by the riches of oil production. The parliamentary-election results could sway decisions on when or whether to lift the ban.

Removing it would clear the way for contractors with experience in offshore drilling to explore for oil, much as Cuba has contracted with Repsol, a Spanish company, to begin drilling in waters north of Havana.

A giant, floating Chinese-made rig named Scarabeo 9 is slowly chugging across the ocean from Singapore toward Cuba to begin drilling next month about 22 miles north of Havana and 70 miles south of the Florida Keys. The U.S. Coast Guard is making contingency plans in case a spill produces an oil slick that rides the Gulf Stream toward Florida.

Drilling off Cuba and Mexico – plus the prospect of wells near the Bahamas and potentially elsewhere in the Caribbean – prompted Graham, Piñón and environmentalists to call for regional cooperation on safety measures and to pool resources to contain a possible spill.
U.S. officials would prefer to discuss such matters through multinational forums rather than directly with Cuba, and they may get their chance this week. The International Maritime Organization, a U.N. agency that focuses on marine safety and pollution, is hosting a workshop Wednesday to Friday in the Bahamas on contingency plans for an oil-spill disaster. Delegations are expected from the United States, Cuba, Mexico and Jamaica, which also is considering oil exploration.

Drilling plans in the region have also prompted some in Congress to press for more offshore production in U.S. waters, including the Atlantic coast and the eastern Gulf along Florida’s west coast.

“You know, someone’s going to do the drilling,” said U.S. Rep. Allen West, R-Plantation. “If we are not going to take advantage of the resources we have available to us, my concern is that all of a sudden they [Cuba and other countries] start to slant drill. And if there is a catastrophic event, they aren’t going to care what happens to our beaches or shores.”
“Repsol and Cuba and China and everyone else is going to continue to close the noose around our necks as far as energy independence is concerned,” West said. “Wouldn’t it be a shame if down the road we’re going to China or Cuba or someone else for energy resources that we allowed to be taken right from under our noses?”

wgibson@tribune.com or 202-824-8256

Special thanks to Richard Charter

http://www.miamiherald.com/2011/12/05/2532384/white-house-releases-report-on.html

Posted on Monday, 12.05.11

BY CAIN BURDEAU
ASSOCIATED PRESS

NEW ORLEANS — The Obama administration has released a report on how the Gulf Coast can be restored following the nation’s worst offshore oil spill after the Deepwater Horizon drilling rig explosion off the coast of Louisiana in April 2010.

The report from the White House’s Gulf of Mexico Ecosystem Restoration Task Force comes out the same week Congress considers a bill designed to handle billions of dollars in Clean Water Act fines BP is expected to pay for the release of more than 200 million gallons of oil into the Gulf.

The restoration plan is a recipe for fixing the Gulf Coast’s myriad of environmental problems – from land loss in the Mississippi River delta to the area of low-oxygen called the dead zone that besets the northern Gulf waters every summer.

Special thanks to Richard Charter