admin /9 July, 2006
This week the case for doing oil business with Cuba was further reinforced by a report in The Wall Street Journal showing offshore drilling rigs are leaving US waters in the Gulf of Mexico for better paying work in more prospective areas of the world, reported The Australian (7/7/2006, p.22).
Gulf oil rigs shrink from 148 to 90 in five years: In 2001 there were 148 oil rigs in the Gulf compared with 90 today. With more expected to leave soon, it is predicted Gulf production declines will be accelerated, putting more upward pressure on US domestic energy prices.
Gulf region supplies 25pc of US oil and gas but production falls: The Gulf region produces 25 per cent of US oil and gas but oil production fell alarmingly by 19 per cent between 2003 and 2005. This when the US urgency for more reserves it can call its own has never been greater.
Crunch time for gas exploration: The oil rig exodus is expected to be felt hardest in gas exploration. Many of the rigs leaving are shallow water "jack-up" rigs used for gas exploration. This is a major problem for two reasons: Gulf gas reservoirs are often quickly exhausted, requiring energy companies to keep drilling to maintain production; and gas prices are tipped to rise from about $US6 per million BTUs (British thermal units) today to $US10 by the end of next year.
Cuban waters entice US companies: So the presence of familiar US companies in Cuba’s enticing, unexplored waters may be just the lure needed to keep this vital energy infrastructure close to home and working to find supplies the US needs to establish greater energy self-reliance.
Cuba… or Iran? Some of the alternatives for the US are not all that attractive. The world’s second-largest reserves of natural gas are in Iran.
The Australian, 7/7/2006, p. 22
Source: Erisk Net