A U.S. Department of State spokesman invited U.S. oil pollution containment companies to apply for licenses to provide support for third-country companies in Cuban offshore drilling.
Asked by a reporter during the daily press briefing to comment on Repsol YPF’s soon-to-begin exploratory drilling in Cuban waters and fears about another environmental disaster, spokesman P.J. Crowley read a statement saying that “U.S. oil spill mitigation service companies can be licensed through the Treasury Department’s Office of Foreign Assets Control (OFAC) to provide oil spill prevention and containment support to companies operating in Cuba.”
The U.S. government has granted licenses to pollution control businesses in the past, says Jorge Piñón, a Miami-based oil industry consultant. Fort Lauderdale-based Clean Caribbean & Americas, for instance, has a license to export oil containment booms to Cuba.
“What is needed is an executive order or federal legislation allowing U.S. oil equipment and services companies to provide goods, services and personnel to oil companies operating in Cuba in the event of an emergency,” Piñón said. “You never know what piece of equipment you are going to need from whom. In the event of a blowout, you don’t have the time to go through a tedious exercise of going over a list of ‘licensed’ suppliers. It should be an industry-wide license.”
Even so, Washington’s move opens another small crack in the door to Cuba for U.S. oil services companies. The announcement comes after, in May, the Administration granted a travel license to the Houston-based International Association of Drilling Contractors (IADC). The group is planning to brief Cuban officials in Havana in August on deepwater drilling safety measures.
Madrid-based Repsol YPF contracted an oil rig from the subsidiary of Italian oil company ENI for exploratory drilling just north of Havana, in a consortium with Norway’s Statoil and India’s ONGC Videsh. The Scarabeo-9 platform is currently under construction in China. It took the Spanish oil company four years to obtain a rig, due to U.S. sanctions.
“The Deepwater Horizon oil spill in the Gulf of Mexico demonstrates the critical need to take adequate safety measures and planning precautions in offshore drilling,” Crowley said. “We expect any company engaged in oil exploration activities to have adequate safeguards in place to prevent oil spills and contingency plans to address a spill should it happen.”
Crowley added that the Obama Administration “will continue to pursue these and other initiatives within our authority in order to minimize risk to U.S. waters and shores.”
Legislation that would exempt some offshore oil drilling activities in Cuba from embargo restrictions is winding its way through Congress. A bill originally introduced by Sens. Lisa Murkowski (R-Ak.) and Mary Landrieux (D-La.) last summer may be included as an amendment in a large climate and energy bill.
Although it won’t explicitly exempt all oil-related activities from the embargo, the law would be a first step towards allowing U.S. oil companies getting active in Cuba. The original Cuba language presented by Murkowski and Landrieux would allow U.S. citizens and residents to “engage in any transaction necessary” for oil and gas exploration and extraction in Cuba — “notwithstanding any other provision of law.”
For that purpose, the bill would amend the Trade Sanctions Reform and Export Enhancement Act of 2000, allowing oil industry employees to travel to Cuba without having to apply for a specific license with OFAC.
The bill passed the Senate Committee on Energy and Natural Resources last fall, but it has since stalled. The Petroleum Equipment Suppliers Association (PESA) has come out in favor of the Cuba language.
