In late January, Spain’s Repsol began drilling in the Northbelt Thrust, a stretch of the offshore Caribbean that may contain 6 billion barrels of oil. Between now and next month, Repsol will learn whether its part of the Thrust has commercial oil. But the company will be judicious with any news (pictured above, Repsol rig), uncertain whether it will be greeted with the hoots and cheers with which the industry typically greets word of a fresh discovery.
The Northbelt Thrust falls into a curious category on the global oil patch. Like dark matter in the universe, it is a blank spot, one of a few places with big proven and potential reserves that are wholly ignored in official forecasts. For it is offshore from Cuba, a political pariah in the U.S.
Wall Street, major commercial consultant firms, and government energy agencies appear to feel uncomfortable lending serious public attention to Cuba’s potential for big strikes this year, as I write at EnergyWire. For differing reasons, Venezuela, too, is part of this alter-reality.
I asked a senior Wall Street contact why his firm’s reporting excludes Cuba and Venezuela. “They have no oil supply growth,” he replied, which at the moment technically is true — yet may turn out not to be in a matter of weeks in the case of Cuba.
Jorge Pinon, who worked for years as an Amoco executive in Latin America, told me that companies and firms are simply heeding U.S. political reality, starting with the role of Cuban-American Ileana Ros-Lehtinen as a leader of the Republican majority in the House of Representatives. He said:
When you have a Cuban delegation in Congress that is very powerful, and among them is the chairman of the House Foreign Relations Committee, you have to be extremely careful how you play Cuba.
Repsol is drilling in Venezuela, too, and expects to be producing an additional 400,000 barrels a day in a field called Carabobo in 2014, according to spokesman Kristian Rix (Chevron also says it will produce from Carabobo, in its case this Fall). Rix told me that Repsol expects to produce natural gas in 2014 as well from a field called Perla, which contains the equivalent of 3 billion barrels of oil. These volumes will more than make up for what Repsol lost this week in Argentina’s expropriation of its oil holdings there.
All in all, even though work tends to go slow in Venezuela, the country could add another 1 million barrels a day in production by 2020 should it work closely with foreign companies, said David Voght, managing director of IPD, a consulting firm.
But it is Cuba about which Repsol is especially circumspect. When the company is done with its Chinese-made rig, it will hand it over to Malaysia’s Petronas, which has plans to quickly get started on an adjacent field in the Northbelt Thrust. Then the rig will go back to Repsol, for more potential work on its field, called Jaguey.
Should there be a gusher, don’t expect to see any marching bands. Pinon: “They don’t want to give a lot of fanfare to their Cuban activities because it’s counter-productive for them.”