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Repsol To Adandon All Remaining Leases in Chuckchi Sea

Offshore Arctic Rig

The Spanish oil and gas company Repsol will be abandoning all 93 of its drilling leases in the Chukchi Sea by the end of the coming year, according to a statement released by an official spokesperson on Tuesday.

The firm relinquished 55 of its 93 leases on 1 June, and the remaining 38, located in the same body of water off the shore of Russia, will have the same fate in the near future.

“Repsol is in the process of relinquishing its Chukchi Sea acreage position offshore Alaska,” spokesperson Jan Sieving said.

The company bought the leases covering 530,000 total acres of the large sea at a cost of $15 million in 2008 as part of a record-breaking sale. Once the leases have been abandoned, the sole active lease in the sea will belong to Shell.

Recent months have seen other oil majors, such as ConocoPhillips, Eni, Iona Energy and Shell give up over 350 leases that covered more than two million acres of the Chukchi Sea, Oceana, an environmental group told Platts after sifting through documents from the U.S. Department of the Interior.

Shell failed to find any major oil and gas deposits in its leased land in September—seven years and $7 billion wasted on an empty exploratory well.

Sieving said Repsol 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.

Related: An Oil Price Rebound Is Not Enough For The Bakken

Repsol’s 71 remaining leases 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.

Onshore and near-shore leases Repsol holds with Armstrong Oil and Gas are also being reconsidered, Sieving said, adding that the firm still “fully supports” its joint Pikka Unit project with Armstrong.

By Zainab Calcuttawala for Oilprice.com

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