Last week we highlighted a disturbing story about how Cuba is going to allow the Russians to drill in the Gulf of Mexico, potentially as close as 45 miles from the American shoreline.


We pointed out how it makes no sense for the Cubans to allow drilling so close to our shores while our own government has needlessly delayed the process for American oil and gas exploration.

But in today's Wall Street Journal, the narrative of our current irrational energy policy got worse: America will be financing offshore oil and gas exploration... in Brazil.

http://online.wsj.com/artic...346610120524166.html
That's right. Our own Department of Interior chose to delay exploration for American oil back in February. And now our government has decided that we should not only keep that de facto ban in place here at home, but that we should finance other countries' offshore drilling efforts.
http://www.doi.gov/secretar...s/021009_speech.html

This is unacceptable for American taxpayers, and it is an unacceptable energy policy.

Be sure to visit YourEnergyOpinion.com today and tell the Department of Interior that you support American energy and American jobs.
http://www.yourenergyopinion.com/
http://www.americansolution...-there-drill-now.php

Sounds about right. Environmentalists would rather get their oil based products from overseas. They forget that other country's environmental regulation is nowhere near our level if they even have any. I guess it is classic NIMBY. Keep America green but to hell with those third world countries.

quote Originally posted by Doug85GT: Sounds about right. Environmentalists would rather get their oil based products from overseas. They forget that other country's environmental regulation is nowhere near our level if they even have any. I guess it is classic NIMBY. Keep America green but to hell with those third world countries.

Don't worry - I'm sure we'll then pay some sort of "Green Penalty" to offset the destruction we cause over there....

quote Originally posted by avengador1: Last week we highlighted a disturbing story about how Cuba is going to allow the Russians to drill in the Gulf of Mexico, potentially as close as 45 miles from the American shoreline. We pointed out how it makes no sense for the Cubans to allow drilling so close to our shores while our own government has needlessly delayed the process for American oil and gas exploration.

We ? Refresh my memory.
Cuba can not allow Russia to drill in our waters. Fact of the matter is that they can whale fish there.
Our own government has needlessly delayed the process for American companies ?
You can't fix stupid.

Damn stupid commies.




(lower right corner = Gitmo)

[This message has been edited by NEPTUNE (edited 08-18-2009).]

The "we" is American solutions. I copied and pasted their article. Here is the article they are refering to originally.
http://www.americansolution...l-here-drill-now.php

quote Originally posted by Neptune: Cuba isn't anywhere near the Gulf of Mexico. Its in the Caribbean/Atlantic.

Isn't Cuba part of the gateway to the Gulf?
Read this from Wikipedia.

quote Exclusive economic zone An exclusive economic zone extends for 200 nautical miles (370 km) beyond the baselines of the territorial sea, thus it includes the territorial sea and its contiguous zone.[3] A coastal nation has control of all economic resources within its exclusive economic zone, including fishing, mining, oil exploration, and any pollution of those resources. However, it cannot regulate or prohibit passage or loitering above, on, or under the surface of the sea, whether innocent or belligerent, within that portion of its exclusive economic zone beyond its territorial sea. Before 1982, coastal nations arbitrarily extended their territorial waters in an effort to control activities which are now regulated by the exclusive economic zone, such as offshore oil exploration or fishing rights (see Cod War). Indeed, the exclusive economic zone is still popularly, though erroneously, called a coastal nation's territorial waters.

I'm sure this covers some of the gulf. Even your map shows this. I see you edited your post after seeing that. How long have you lived in Florida and not known that?

[This message has been edited by avengador1 (edited 08-18-2009).]

Ok, I'll try to keep this alive for a little while.
It IS an interesting topic, after all.
Since Cuba no longer receives aid from the USSR (because there is no more USSR), they are extremely hungry for cash.
They desperately want to sell these offshore oil/gas leases to ANYONE who has a checkbook.
They do not have the $$ to develop them themselves.
They would be happy to sell them to US companies like EXXON, Texaco, or whomever.
So why aren't the US companies bidding on these offshore leases?
Do they think there isn't anything there, or are there other reasons?
Its a buyers market, so why isn't anyone buying?

[This message has been edited by NEPTUNE (edited 08-18-2009).]

quote Originally posted by NEPTUNE: They would be happy to sell them to US companies like EXXON, Texaco, or whomever. So why aren't the US companies bidding on these offshore leases? Do they think there isn't anything there, or are there other reasons? Its a buyers market, so why isn't anyone buying?

http://tinyurl.com/nuxm9f

quote Originally posted by Formula88: http://tinyurl.com/nuxm9f

Thanks for absolutely nothing.
Anybody have anything tangible to offer?

------------------

Mean People Suck

quote Originally posted by NEPTUNE: Thanks for absolutely nothing. Anybody have anything tangible to offer?

Yep. Once bit twice shy. Nationalization. Cuba nationalized everything American or otherwise foreign way back when. Industry has a long memory. Cuba's brother in socialism Chavez has much more recently done the same. On top of that, I'm not even sure American industry can legally enter into any kind of business agreement with Cuba. AFAIK, there are still sanctions and restrictions out of the Dept of State that forbid such a partnership.


And, I'd have to check, but I think the water depth around Cuba, especially on the southeast side gets deep--fast. Gulf of Mexico is comparitively shallow. The Caribbean is not. Cuba gets hit by tropical storms and hurricanes on a regular basis, which would make drilling a precarious venture--and deepwater drilling is not cheap.

[This message has been edited by maryjane (edited 08-18-2009).]

quote Originally posted by maryjane: Yep. Once bit twice shy. Nationalization. Cuba nationalized everything American or otherwise foreign way back when. Industry has a long memory. Cuba's brother in socialism Chavez has much more recently done the same. On top of that, I'm not even sure American industry can legally enter into any kind of business agreement with Cuba. AFAIK, there are still sanctions and restrictions out of the Dept of State that forbid such a partnership.

Hmm. Interesting.
So its better to buy oil from Saudi Arabian companies than it is to let US companies drill in our own back yard?
Why do I get the feeling that something is missing from this story?
Things like this usually happen (or don't happen) for a reason.
Honestly, I'm so busy with three jobs and a column that I just can't keep up with current events the way I used to.

Ya do know how these things work don't you? A country sells leases to an exploration company such as BP. BP spends billions finding and developing a field. Once the field (yes, they are still called fields even offshore) has been developed and is online, the owner nation nationalizes the whole operation. BP is out of luck--with their only hope left is to spend a ton of $ going thru the world court for recoupment.

Last time I checked, we still had an embargo on trade with Cuba for US citizens and corporations. Question asked and answered. Sort of.

BP is not a US Company and could buy up these leases if they wanted. Could very well be they're not worth anything, I don't know. If there's no oil down there, they aren't worth much.

John Stricker

quote Originally posted by NEPTUNE: Ok, I'll try to keep this alive for a little while. It IS an interesting topic, after all. Since Cuba no longer receives aid from the USSR (because there is no more USSR), they are extremely hungry for cash. They desperately want to sell these offshore oil/gas leases to ANYONE who has a checkbook. They do not have the $$ to develop them themselves. They would be happy to sell them to US companies like EXXON, Texaco, or whomever. So why aren't the US companies bidding on these offshore leases? Do they think there isn't anything there, or are there other reasons? Its a buyers market, so why isn't anyone buying?

quote Originally posted by jstricker: Last time I checked, we still had an embargo on trade with Cuba for US citizens and corporations. Question asked and answered. Sort of. BP is not a US Company and could buy up these leases if they wanted. Could very well be they're not worth anything, I don't know. If there's no oil down there, they aren't worth much. John Stricker

I just used BP as an example. I suspect BP, Total, Shell, Citgo or any of the other big foreign exploration companies would jump on this--well, maybe not Citgo--they're pretty well tied up.

quote Originally posted by jstricker: Last time I checked, we still had an embargo on trade with Cuba for US citizens and corporations. Question asked and answered. Sort of.

My link goes to a Google search for "cuban embargo" but Neptune thinks the embargo isn't tangible.

quote Originally posted by Formula88: My link goes to a Google search for "Cuban embargo" but Neptune thinks the embargo isn't tangible.

No, your link goes to Google search.
Period.
If you did the search, you should have posted a link.
Or you could have gone drinking with Wichita.
Either would have added the same amount of information to this discussion.

So, why isnt' BP buying up these potentially valuable leases?
They aren't an American company, and they aren't bound by US State Department edicts.
Maybe they think there's nothing there?
Maybe there are other reasons?

[This message has been edited by NEPTUNE (edited 08-18-2009).]

quote Originally posted by NEPTUNE: No, your link goes to Google search. Period. If you did the search, you should have posted a link. Or you could have gone drinking with Wichita. Either would have added the same amount of information to this discussion.

Do you know how to operate a hyperlink?
That Google search page it goes to has a bunch of links on it from the "cuban embargo" search it just ran.

Neptune: The poster child for Florida's Public School System.

Holieee Moleeeeey! The Cayman Trench is one deep son of a gun. 7000 Meters before the bit even starts stirring up mud!
Somebody better start making a LOT of drill pipe and casing. "spot depth in meters"

I told ya the SE side got deep--fast!

[This message has been edited by maryjane (edited 08-19-2009).]

Interesting, Don.
I thought 7686 meant feet.
Meters?
Hollee mollee is right!
Maybe this would be a good time to buy stock in a pipe manufacturer?
Or maybe todays (and tomorrows projected) oil prices make this project unfeasible at this time because of the expense?
Now I am beginning to understand why that particular part of the Atlantic is home to so many HUGE game fish, and has been since before Hemingway fished there.

[This message has been edited by NEPTUNE (edited 08-19-2009).]

Well, I guess Cuba's territorial waters are a lot shallower than that, but still, it's deep. A drill ship is rated by how much pipe or casing the hook and derrick can pick up. Biggest hookload I ever saw personally was a tad over 1 million lbs and that was on land and at total depth of around 29,000 ft.--which was a little over our rated hookload.

If I remember correctly, the trench is so deep because its a "fault line," or a place where two tectonic plates are either pulling apart or climbing over each other.
I think in this case its the former.
I suppose that would complicate ($$) the drilling process.
I appreciate your insight, Don.
Since you've "been there, done that" your opinion carries a lot of weight here.

Been there in the oil patch, but it's been a couple of decades ago. I also spent 2 US Navy years in GTMO Cuba, which is how I knew it was deep water.

You are correct about oil prices being a big factor in a new play, especially one where there is absolutely zero infrastructure in place to support it. Here's what has to happen for what is in the ground to make it on the world market, in a situation like this.
1. Govt red tape has to be dealt with--probably in more than 1 national capitol. Among the things hashed out is what % the oil exploration company will get--and how soon in the production process, environmental concerns, how much indigenous labor will be used, where and what kind of production/terminal facility will be used.
2. Any interested company will do a feasability study to estimate costs and practibilty.
3. A lease competition for the exploration end has to be completed--there will be more than 1 company vying for the leases.
4. The company (s) will do subsea seismic work and sea floor bottom mapping.
5. Depending what the exploration phase shows, a suitable drill rig either has to be leased, brought in, or a completely new one may have to be designed, & built, to accomodate all existing or unique to this project conditions and moved on location.

Everything above could take from 1 to 5 years--depending on unique aspects of this area.

6. The drill equipment is brought in. Offshore rigs drill from a template under the drill floor, meaning they will drill as many wells as possible from the same location setup. I've seen them drill up to 16 separate wells and never move an inch. That may have multiplied since I was involved in that business.

( an exploration company may have spent a billion $ or more up to this point)

7. The first series of wells will probably not be production wells--they are test wells to verifiy qty (bpd), flow characteristics, quality, specific gravity of the oil, salt water content in the flow, any corrosion problems etc.
Assuming they find hydrocarbons in suffecient quantity to make production financially worthwhile, production contract work will begin with the host nation. This is where the producer (Exxon/Shell/BP etc) will try to protect their investment, and the host nation will try to protect it's interest in it's own resources.

8. If all goes according to plan, more drill platforms or drill ships come in, and commence real drilling for production assets.

9. Subsea pipelines are built. A production platform is designed and built. Oil runs from the wellheads on the sea bottom, to the production platform, where salt water is removed from the oil. Nat gas is also separated from the oil here.

10. To sell the oil, it has to go on to tanker ships. You can't tie a sea going supertanker up to a production platform, so either an offshore oil terminal has to be built from the ground up, and more subsea pipelines run to it, or to an onshore facility--neither of which, even exists yet.

This is big money--lots of risks, won't happen overnight, and lots of work. Since no one knows at this stage what the future of fossil fuel is going to hold, it's an even bigger risk. The market is currently down, demand is way down. No one is having any problems replenishing their annual usage reserves.

Fishing in Guantanamo Bay ruined me for fishing. I still go of course, but those 2 years of catching all the grouper, red snapper, ling, and everything else imaginable-every day, is kinda hard to compare to while I am fishing my little 5 acre pond. GTMO is one of the largest and deepest natural harbors in the world& we're lucky to have it.

And yes, there is tetonic activity & I experienced the only 2 earthquakes of my life while there. Very small tremors really, but it was an enlightening experience for an ol Texas boy from Houston.

quote Originally posted by FieroRumor: Don't worry - I'm sure we'll then pay some sort of "Green Penalty" to offset the destruction we cause over there....

If Cap and Tax passes, WE (every one of us) will be taxed on energy, and a lot of the money will go to other countries.

Thanks for the informed comments, Don.
Since this is kinda my own back yard, I'm glad to have the information.

[This message has been edited by NEPTUNE (edited 08-19-2009).]

Doesn't the UN embargo, and the US economic embargo also forbid US companies from buying into or investing in any Cuban interests?

Its been in place since JFK was president, right after the Cuban missile crisis.

quote Originally posted by htexans1: Doesn't the UN embargo, and the US economic embargo also forbid US companies from buying into or investing in any Cuban interests? Its been in place since JFK was president, right after the Cuban missile crisis.

BP, CITGO, and Shell, among others, aren't American companies.
I THINK they could buy these leases if they wanted to.

I'm sure someone will correct me if I'm wrong.

[This message has been edited by NEPTUNE (edited 08-19-2009).]

http://www.americansolution...zar-have-to-hide.php

quote For eight months Americans submitted comments to the Minerals Management Service regarding the newest offshore oil and gas leasing program in the Outer Continental Shelf. Even though the comment period ended over a month ago, MMS has been mum on the breakdown of the results. Despite claims by Secretary of Interior Ken Salazar that the process for leasing portions of the Outer Continental Shelf for oil and gas would not happen "behind closed doors," that looks to be exactly what is happening. So today we filed a Freedom of Information Act (FOIA) request to MMS to disclose all relevant documents relating to the comment period, including comment tabulations and internal correspondence discussing the results. The Department of Interior did confirm that it received more than 530,000 total comments for the Draft Proposed Outer Continental Shelf Oil and Gas Leasing Program, 2010-2015. Sources confirm that comments in support of offshore drilling outnumber those opposed by 2-1, yet the administration is refusing to tell the whole truth about what Americans want and how they plan to move forward. Rather than waiting for more bureaucratic delays, we decided to submit a FOIA to get to the bottom of this. As you recall, the administration already delayed the offshore leasing process by six months in February. In September, Secretary Salazar hinted that he might delay the process yet again, regardless of what Americans told MMS. The administration wanted the process to be transparent and repeatedly told us that our comments would be vital in helping them determine how to move forward with this process. We want to make sure that's the case. Americans deserve to know how (or if) their government is working for them.

Nothing really new there. Offshore Leases are always done somewhat secretly. It's a bidding process.

reminds me of the drunk slut theory.....

if you dont do it, someone else will.

quote Originally posted by maryjane: Ya do know how these things work don't you? A country sells leases to an exploration company such as BP. BP spends billions finding and developing a field. Once the field (yes, they are still called fields even offshore) has been developed and is online, the owner nation nationalizes the whole operation. BP is out of luck--with their only hope left is to spend a ton of $ going thru the world court for recoupment.

yes cuba did nationalize their sugar lands and plants 50 years ago
but chavez has paid cash for everything he has nationalized at market value

btw sea floor off the north coast of cuba is shallow

quote Originally posted by ray b: yes cuba did nationalize their sugar lands and plants 50 years ago but chavez has paid cash for everything he has nationalized at market value

Yes, at current market value --current meaning as of the date it was 'bought" (nationalized), but industry does not develop business for 'today'--they expect a long term return on that investment.
It's equilivent to you building a hamburger joint, and expecting a long term return of $.05 profit on every hamburger sold for the rest of your life, but suddenly having the city take your hamburger joint under imminent domain--giving you only what you paid for the building and grounds. You may not have lost anything you have in it, but you lost your expected return. There's no future in 'break even" deals.

Chavez is now paying the price for that--he is begging for foriegn investors, and they aren't returning his calls.