The Spanish company Repsol announced a find in Alaska that could be the largest "onshore conventional hydrocarbons discovery" made in the United States in the past thirty years, according to a new report by Oil and Gas Investor.
The company said on Thursday that it and partner firm Armstrong Energy had struck light oil in Alaska's North Slope in the Nanushuk Play. The "emerging" field could hold up to 1.2 billion barrels, new results from Horseshoe No.1 and 1A wells show. Madrid-based Repsol holds a 25 percent interest in the Horseshoe discovery.
Plans for production development in the nearby Pikka field could potentially extract oil at a rate of 120,000 barrels per day by 2021.
During June 2016, Repsol had been reconsidering its stakes in the Pikka operation, according to statements made by spokesperson Jan Sieving.
Sieving said at the time that the company would also be reevaluating the value of its leases in the Beaufort Sea. The company jointly owns 22 leases there with Eni and Shell and seven others in the same body of water with just Eni.
"Some blocks may be relinquished periodically as the portfolio is high graded," she said.
Repsol's 71 remaining leases in Alaskan waters cover 367,000 acres, which amounts to roughly a fourth of the land area over which the company had rights over following three major lease buys in 2008, before oil prices collapsed.
Related: Is The Oil Price Plunge A Turning Point?
Shrinking output has been squeezing Alaska's state budget for some time, but it could soon become a much more acute problem for state finances if the declines are not reversed. This is because the Trans-Alaskan Pipeline System (TAPS), which runs from the North Slope across the state to the south, is threatened by low oil flows. When the system sees oil flows drop below 500,000 bpd, risks to pipeline integrity grow. Water can separate from the oil and freeze, corroding the pipeline.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More
Comments
The Earth's core is made of iron carbide. Carbon is leaching off constantly.
Break even for oil producers is $40/bbl. Break even for OPEC socialism is $100/bbl.