Repsol to allow US inspections of Cuba-bound rig

Repsol YPF SA, which is scheduled to begin exploratory drilling in Cuban waters, has offered US agencies an opportunity to inspect the vessel and its equipment before it arrives at the well site, US Bureau of Safety and Environmental Enforcement (BSEE) Director Michael R. Bromwich said on Oct. 18. But a witness on a second panel testifying at the same US Senate Energy and Natural Resources Committee hearing suggested that the US government should work equally hard to engage national oil companies that also are scheduled to begin exploring for crude oil offshore Cuba.

“The international oil companies that are operating in Cuba have experience in deep water,” explained Jorge R. Pinon, a visiting research fellow at the Cuban Research Institute at Florida International University’s Latin American and Caribbean Center. “The issue is that we haven’t made any effort to approach them, but have solely focused on Repsol and have asked it questions about proprietary information such as the pressure of the reservoir.

Pinon mentioned Malaysia’s Petronas, which is developing another project in the area in a partnership with Russia’s OAO Gazprom. “As soon as the rig drilling the well for Repsol finishes there, it’s going to move next door and start working for them.”

Bromwich noted that while BSEE doesn’t have regulatory authority over Repsol’s Cuban activities, the Spanish multinational began providing information about its drilling plans and spill response capabilities to the US Department of the Interior in February.

“In our numerous communications with Repsol, we have made clear that we expect it to adhere to industry and international environmental, health, and safety standards and to have adequate prevention, mitigation, and remediation systems in place in the event of an incident,” he told the committee. “Repsol officials have stated publicly that in carrying out its exploratory drilling plans in Cuban waters, it will adhere to US regulations and the highest industry standards.”

Welcome opportunity

Repsol also offered US agencies the opportunity to board the Saipem’s Scarabeo 9 ultradeepwater 6th generation semisubmersible drilling rig that it intends to use before it enters Cuban waters to inspect the rig and its drilling equipment and to review relevant documentation, Bromwich said. BSEE and the US Coast Guard welcomed the opportunity and plan to coordinate a joint visit at that time, he indicated.

“I want to be clear. We, together with the [USCG], plan to conduct an inspection of this rig,” Bromwich said. “It’s brand new, and we’re aware of all of its specifications. Because of our relations with Cuba, we will be doing it outside of Cuban waters. Some of the inspections we normally would do on-site, such as on the blowout preventer, we will need to do at this time. But Repsol has been very cooperative in making it possible for us to inspect the rig as thoroughly as possible.”

Bromwich said Repsol also has expressed a desire to keep US regulators and spill response planners abreast of its oil spill response preparedness activities offshore Cuba. “Along with other US representatives, BSEE has already witnessed a table-top spill response exercise held at the Repsol office in Trinidad,” he said. “During the exercise, Repsol’s spill management team mobilized to respond to a hypothetical spill and demonstrated response equipment deployment capabilities. Repsol has subsequently invited BSEE and [USCG] officials to observe another emergency drill in Trinidad related to contingency planning for the drilling.”

“I don’t want to overstate our confidence. We are given it by Repsol’s willingness to cooperate, but it’s not optimal,” BSEE’s interim director said. “We believe that it’s the best we can do to protect US interests, given the conditions. We obviously can’t press Cuba to follow our standards. Our only resource is to work with the company that’s drilling the well.”

Pinon said Repsol is the only publicly traded non-US oil company operating in the Gulf of Mexico region outside the US. “All others are state-owned, national oil companies over which our sphere of influence is limited or nonexistent, and over which the question of sovereign immunity is to be considered,” he said. Transboundary compensation for oil pollution damages, the role of international oil pollution liability conventions, and recovering costs when one country provides most of the incidents spill response and cleanup assets and resources also have to be considered, he suggested. Discussions will need to emphasize cooperation over confrontation, Pinon said.

Other countries

Bromwich noted that in addition to BSEE’s communications with Repsol, the agency and its predecessors have collaborated with its counterparts in Mexico since the late 1990s on issues related to safe development of resources in the gulf. BSEE also is working with other federal agencies on other regional initiatives with Mexico, Cuba, the Bahamas, and Jamaica, including a seminar sponsored by the International Maritime Organization in the Bahamas later this year, he said.

Pinon said he has the impression that most of the emphasis has been on responding to spills instead of preventing them. “I have worked with a lot of countries with impressive regulations, but without the resources to enforce them,” he told the committee. “I am sure the Bahamas, Cuba, and Mexico will have the best policies and standards available in their regulations, but I doubt they’ll have the capacity to enforce them. That’s why it’s important to have operators with Repsol’s quality of operations.”

Bromwich also said the US is taking steps to assure that the appropriate oil and gas industry entities can respond quickly if there’s a spill in Cuban waters. He said that the US Departments of Commerce and the Treasury have a long-standing practice of providing licenses to address environmental challenges in Cuban waters, and that DOC’s Bureau of Industry and Security has issued a number of them for booms, skimmers, dispersants, pumps, and other equipment and supplies to minimize environmental damage from a spill. “I believe the Commerce and Treasury departments would move quickly to approve more licenses if needed,” he said.

A third witness was not as confident. Paul A. Schuler, president of Clean Caribbean & Americas, an international spill response cooperative operating in the region, said only three US companies have such licenses that must be renewed every 1-2 years. “It needs to be handled in advance, and not as an ad hoc action as part of a response to an oil spill,” Schuler said. “Others would have to go through the entire licensing process, and my experience has been that it has not been quick.”

Other witnesses included Vice-Adm. Brian M. Salerno, USCG’s deputy commandant for operations, and Mark A. Myers, vice-chancellor for research at the University of Alaska at Fairbanks, who discussed oil spill response questions that have emerged in Canada, Russia, the US, and other countries considering offshore oil and gas resource development in the Far North.

Contact Nick Snow at nicks@pennwell.com.

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