* Rig expected to arrive in Cuban waters in November
* Repsol to drill first wells soon after rig arrival
* Cuba says may have 20 billion barrels of oil offshore
By Jeff Franks
HAVANA, Aug 26 A new, Chinese-built drilling
rig was expected to depart Singapore on Friday or later this
weekend on its way to Cuba where it will be used to usher in a
new era in offshore oil exploration for the communist-led
The Scarabeo 9, owned by Italian oil giant Eni SpA's
[ENI.MI) offshore unit Saipem [SPMI.MI] and contracted in Cuba
by Spanish oil firm Repsol YPF [REP.MC], was anchored in
Singapore and ready to leave on what an Eni spokesman said
would be an 80-day voyage.
A Western diplomat in Havana said the rig would stop in
South Africa and Brazil before reaching Cuba in November, with
the expectation it will start drilling shortly after arrival.
Oil experts on the island say Cuba may have 20 billion
barrels of oil in its still-untapped portion of the Gulf of
Mexico, although the U.S. Geological Survey estimates reserves
are a more modest 5 billion barrels.
Repsol drilled a well in Cuban waters in 2004 and found oil
there, but for various reasons, including the longstanding U.S.
trade embargo against the island, has not drilled again.
For Cuba, a big oil find will give its struggling economy a
boost and reduce or eliminate its dependence on oil-rich
leftist ally Venezuela, which ships 113,000 barrels a day to
the island at reduced prices.
Opponents of the Cuban government fear that if significant
oil reserves are discovered, it will only further entrench the
communist system and its leaders.
Cuban President Raul Castro, 80, is in the midst of
liberalizing the Soviet-style economy with the goal of assuring
the survival of communism once he and his elderly leadership
group are gone.
The Scarabeo 9, which has the latest technology and is
capable of drilling in up to 12,000 feet (3,600 meters) of
water, was built in Yantai CIMC Raffles Shipyards in Yantai,
China, but after a number of delays was shipped to the Keppel
FELS [KPLM.SI] shipyard in Singapore last fall for completion.
En route to Singapore, the rig took on water, which forced
repairs and an extensive inspection to assure its
Repsol, in a consortium with Norway's Statoil [STL.OL] and
a unit of India's ONGC [ONGC.BO], is expected to drill one or
two wells before passing the rig to Malaysia's state-owned oil
company Petronas and then on the ONGC unit, ONGC Videsh, both
of which have leased their own exploration blocks in Cuba's
Venezuela's PDVSA has said it plans to drill in Cuban
waters within a year, while China's national oil company is
considering whether to lease offshore blocks as well, a Cuban
oil official recently told Reuters.
Cuban waters border the U.S. part of the Gulf of Mexico and
that of Mexico, but U.S. oil companies are forbidden from
working in Cuba due to the U.S. embargo put in place five
decades ago with the aim of toppling Cuba's communist
(Additional reporting by Stephen Jewkes in Milan and Marc
Frank in Havana; Editing by Vicki Allen)