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U.S. lawmakers urge Repsol to drop Cuba oil plans

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MIAMI (Reuters)—A group of 34 U.S. Congress members has asked Spain's Repsol YPF to drop plans to explore for oil off Cuba, saying the company could face commercial risks and lawsuits in the United States.

Repsol's plans to use a contracted Chinese-built rig to drill exploration wells later this year in Communist-ruled Cuba's deep waters in the Gulf of Mexico has aroused opposition in neighboring Florida, which is a Cuban-exile stronghold.

But the Cuban oil project has also prompted calls for the United States to cooperate with Havana to avert any possible environmental accident similar to the massive BP P.L.C. oil spill in the U.S. Gulf of Mexico last year.

In a letter dated Sept. 27 sent to Repsol Chairman Antonio Brufau, Republican and Democratic representatives led by Rep. Ileana Ros-Lehtinen, R-Fla., warned the Spanish oil firm that it risked damaging its commercial interests with the United States if it went ahead with its oil plans in Cuba.

"We respectfully ask that Repsol abandon any of its proposed oil drilling activities in Cuban waters," the letter signed by all 34 said. It included the signature of Debbie Wasserman Schultz, chair of the National Democratic Committee.

Cuban-born Rep. Ros-Lehtinen chairs the House Foreign Affairs Committee and is a fierce critic of Cuba's communist rulers.

"The decaying Cuban regime is desperately reaching out for an economic lifeline, and it appears to have found a willing partner in Repsol," Rep. Ros-Lehtinen said in a public statement accompanying the letter. "This oil drilling scheme endangers the environment and enriches the Cuban tyranny," she added.

In June, Repsol, responding to U.S. concerns about its proposed Cuba drilling activities, reassured the United States it would follow American environmental requirements and allow U.S. officials to inspect the drilling rig, according to U.S. Interior Secretary Ken Salazar.

The U.S. lawmakers' letter said that since any foreign investment in Cuba required joint ownership and fiscal payments to the Cuban government of President Raul Castro, "any drilling operations that Repsol conducts in Cuban waters will provide direct financial benefit to the Castro dictatorship."

The letter warned Repsol its drilling plans in Cuba could violate U.S. law—including the complex web of sanctions that constitutes the longstanding U.S. trade embargo against Cuba, thereby exposing the Spanish company and its affiliates to "criminal and civil liability in U.S. courts."

Repsol, in a consortium with Norway's Statoil and a unit of India's ONGC, is expected to use the Chinese-built Scarabeo 9 rig to drill one or two wells. The rig, owned by Italian oil giant Eni S.p.A.'s offshore unit Saipem, is on its way to Cuba.

Repsol is then expected to pass the rig to Malaysia's state-owned oil company Petronas and then to ONGC unit ONGC Videsh, which also lease offshore Cuban blocks.

Oil experts on the Caribbean 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 find will boost its struggling economy and reduce or end dependence on oil-rich leftist ally Venezuela.