Letters

Feb. 7, 2011
Cuba and capture

The recent Macondo well explosion in the Gulf of Mexico has caused a slowdown in US offshore oil drilling, as we Americans assess the risks. Cuba doesn't share our concern. Spanish oil company Repsol is scheduled to begin test drilling in the Cuban area of the Florida Strait in late 2011.

Cuba is also negotiating with Brazil oil giant Petrobras on additional drilling leases. Cuba's oil minister, Fidel Rivero, recently noted that Petrobras is the "world leader in deepwater drilling." Actually, the US is the world leader. Our embargo sanctions prevent American oil and drilling service companies from doing business with Cuba, even to assist with an oil spill.

Undeterred by sanctions or drilling restrictions, oil companies from Canada, Venezuela, India, and Norway have also bid for drilling rights from Cuba. Our sanctions on Cuba trade date back to the early 1960s. Recently, we have been allowing sales of food, medicines, and travel by Cuban-Americans to the island.

American drilling companies have sent delegations to Cuba, and they have had held talks with government officials and Cupet, the Cuban national oil company.

Cuban officials, including Tomas Benitez Hernandez, the vice-minister of basic industry, indicated a preference to work with the US, especially on safe drilling practices. Senior Cuban officials told the latest delegation that they are going ahead with their deepwater drilling program and that they will not hesitate to use every reliable non-US source they can for technology.

The US-Cuba 1977 Maritime Agreement divided drilling rights in the narrow Florida Strait, which separates the two countries. Cuba has organized its half of the area into 59 oil exploration blocks and has been actively seeking partners with the capability to explore and drill offshore. The 1977 agreement was never ratified by the US Senate, but it has been renewed every 2 years by US presidential letter. Senator Bill Nelson (D-Fla.) has asked President Obama to recall his diplomatic note to Havana which reinforced the 1977 agreement. Nelson reminded Obama of the environmental risks demonstrated by the BP spill.

By early 2012, Americans should be able to observe Cuba-licensed drilling platforms within 50 miles of Key West. If oil and gas is discovered, it could be in a reservoir that extends under US waters. Then as oil is pumped up in the Cuban sector, pressure in that reservoir will lower. This will cause oil and gas from formations beneath US waters to seep toward the Cuban wells. In property law it's called the rule of capture. You capture it, and it's yours, even if it is coming from under a neighbor's property. This rule is from English common law, and it is in effect for oil and gas in many US jurisdictions. Slant drilling under a neighbor's property is normally prohibited.

A scene from the 2007 film "There will Be Blood" illustrates the rule of capture. The character Eli asks the oil man, played by Daniel Day-Lewis, to purchase an oil and gas lease on neighbor land owned by a member of Eli's church. Day-Lewis, whose land is adjacent, had already extracted the neighbor's oil. He explains: "If you have a milkshake, and I have a milkshake, and I have a long straw, and my straw reaches across the room and starts to drink your milkshake, I drink your milkshake! I drink it up!"

And there are no customs barriers below the seabottom.

Rolf E. Westgard
St. Paul, Minn.

Safety recommendations

With regard to the article "Spill panel seeks overhaul of safety culture, regulation (OGJ Online, Jan. 12, 2011)," the most powerful quantum leap in prescriptive to objective setting in the UK is arguably the Well Construction regulations SI (Statutory Instrument) 913, 1996.

US operators should not be alarmed at the current recommendations. If they studied the detail of the aforementioned legislation, they would see that in most cases they are doing what most professionally staffed organizations are doing already.

Casing design, according to SI 913, must be reviewed by an independent third-party organization. This puts the ball firmly in the operator's hands to demonstrate that the casing design has been approved. Without this approval, drilling cannot commence or continue.

A change, prior to this legislation, was that Department of Energy inspectors were assigned to the independent Health and Safety Executive after the Piper Alpha disaster in the UK and the subsequent Lord Cullen enquiry. This to avoid any potential conflict of interest.

The drilling supervisor, on the rig at the wellsite representing the operator, needs to be strong enough to call a halt to any shortcuts in normal procedure. Many of us in the business know what normal good practice means; following that good practice might have avoided the Macondo oil spill.

In the end, you can legislate all you like, but the integrity of the well and the assets building the well depends upon strong-minded professionals who are not frightened to take a hold, to ultimately protect the interests and assets of the operator as well as those contracted to help.

Robert M. Smith
Research Management Services (RMS)
Methlick, Aberdeenshire
Scotland

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