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ENERGY

Repsol makes largest onshore oil discovery in US for 30 years

Spanish energy giant Repsol announced on Thursday a large find in Alaska that it says holds approximately 1.2 billion barrels of oil.

Repsol makes largest onshore oil discovery in US for 30 years
Photo: AFP

The discovery, made with its US partner Armstrong Energy, is Repsol's biggest since a gas find in Venezuela in 2009, a spokesman said.    

The discovery is “the largest US onshore conventional hydrocarbons discovery in 30 years”, Repsol said in a statement.   

The petroleum found near the village of Nuiqsut in Alaska's north “could amount to approximately 1.2 billion barrels” of oil, it added.   

Repsol has been actively exploring Alaska since 2008. The find was made in two wells in a region where Repsol has made other discoveries with Armstrong since 2011.

The Spanish firm holds a 25 percent interest in the discovery, with Armstrong holding the rest.

“The successive campaigns in the area have added significant new potential to what was previously viewed as a mature basin,” Repsol said.  

The company expects to begin production in the area in 2021, with a potential rate of around 120,000 barrels of oil per day.  

To put that into perspective, Repsol produced 690,000 barrels of oil per day in 2016, a 23 percent increase over the previous year.    

The discovery could also mean a big jump in production for Alaska, helping stem a nearly three-decade decline in its oil output.    

The state's oil production has dropped 68 percent since hitting a peak of two million barrels per day in 1988, according to the Alaska Oil and Gas Association. It currently produces about 600,000 barrels per day.

The Trans-Alaska Pipeline, which transports crude from Prudhoe Bay and other North Slope fields to the southern shores of Valdez, now operates at roughly one-quarter capacity.

The petroleum industry supports one-third of all of Alaska's employment, generating 110,000 jobs throughout the state, which derives around 90 percent of its revenue from the oil and gas sector.

Repsol, together with Italy's ENI, in 2009 discovered the largest offshore gas field in Latin America, the giant Perla field off Venezuela which holds 17 trillion cubic feet of gas.

The company swung back into the black last year, posting a net profit of €1.7 billion ($1.8 billion), boosted by higher oil and gas production as well as a rise in crude prices. It recorded a loss of €1.2 billion in 2015.

Repsol in October 2015 unveiled an ambitious cost-cutting programme which involves slashing billions from capital spending by 2020 and cutting 1,500 jobs out of 25,000 worldwide by 2018.

ENERGY

How millions are being left out in the cold by Spain’s soaring energy prices

In her flat on the outskirts of Madrid, Pamela Ponce no longer turns on the heating despite the biting chill coming in through the windows.

How millions are being left out in the cold by Spain's soaring energy prices
Pamela Ponce at her home in Madrid. The 32-year-old says she hasn't been able to pay her electricity bills for the past three months. (Photo by OSCAR DEL POZO / AFP)

“The prices have gone up a lot, I have no choice,” sighs Ponce, a young Peruvian mother, her voice resigned.

On this bitterly cold January morning, the temperature outside is hovering around five degrees Celsius (41 degrees Fahrenheit). And inside, it’s barely much warmer.

“It can also be very cold inside, above all when there’s no sun,” she says, walking through the three rooms where she lives with her mother and two children in Leganes.

This 32-year-old says she hasn’t been able to pay her electricity bills for the past three months with prices in Spain soaring by a staggering 72 percent over the last year, one of the highest increases within the European Union.

The hike has been in part driven by Spain’s excessive dependence on gas to produce electricity and the lack of a major power provider like in many other countries to help keep prices in check through reduced tariffs.

“Before I was paying between €35 and €60 a month but now, it’s more than €100, without even mentioning gas which has also gone up,” explains Ponce, who hasn’t worked since catching Covid which left her with severe after-effects, notably affecting her left hand.

“I just don’t know what to do,” says the former cleaning lady who admits she’s reliant upon her ex-partner to pay the rent and buy food.

“I feel like I’m drowning,” she whispers, her voice choked with emotion.

According to Spanish government estimates, around 4.5 million people in Spain are affected by ‘energy poverty’, either because they’re incapable of paying the energy bills to cover their basic needs or because they have to put a large part of their earnings towards them. 

In an attempt to heat the flat, Pamela has bought a heater that runs off a gas bottle which she moves from room to room depending on what they need.

“It’s cheaper,” she says. But everything else is strictly rationed.

“My kids only take a shower every other day (and) I generally cook for 2 or 3 days at a time so I don’t have to turn the cooker on so much,” she explains.

SPAIN-ENERGY-SOCIAL-POVERTY

Electricity prices in Spain soared by a staggering 72 percent over the last year, one of the highest increases within the European Union. Photo: Oscar del Pozo/AFP

More and more families affected

And there are countless others like her.

“More and more families are struggling to pay their bills” and “have to chose between paying for food or light at the end of the month,” says Sara Casas, head of environmental issues at the Spanish Red Cross.

Last year, Spain’s left-wing government announced a series of tax cuts to try and bring down household bills but even this has not compensated for the huge rise in prices.

According to the UOC, Spain’s largest consumer organisation, the average annual home electricity bill in Spain has risen from 675 euros in 2020 to 949 euros in 2021, a rise of 41 percent.

The previous record jump, in 2018, was 18 percent.

Vulnerable people, such as “single mums with children, older people with a low income and migrants” are particularly badly hit because many “struggle to get benefits because there’s a lot of red tape and you have to bring in a lot of paperwork,” says Casas.

Layering up, homemade heaters

According to an awareness campaign being run by Medicos del Mundo, some 6.8 million of Spain’s 47 million residents are suffering to one degree or another from “energy poverty”.

Such a situation brings with it “a higher risk of suffering from chronic bronchitis, depression and anxiety,” the NGO says.

One of those struggling is Raul, a 55-year-old computer technician who lives with his wife, daughter and 82-year-old mother-in-law in the
northwestern city of A Coruña.

“Whenever we turn something on, we have to think about how much the bill will go up,” says Raul who hasn’t worked since suffering a stroke in March 2021, with the family living off his wife’s salary.

“My neurologist told me I should avoid stress but it’s very difficult when you don’t know if you’re going to be able to pay next month’s bills,” he says, admitting they have barely switched on the heating this winter, despite the cold and the humidity.

“We bought a heated blanket for my mother-in-law” and “inside the house, I always wear lots of jumpers or coats,” he says.

He has also been trying to cobble together a home-made heater.

“It’s a temporary solution,” shrugs Raul, who says he is keeping his fingers crossed “that the prices will eventually come down”.

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