Repsol finds oil on Alaska’s North Slope

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(W. Ghormley, Alaska Dept. of Environmental Conservation / Alaska Dispatch)
(W. Ghormley, Alaska Dept. of Environmental Conservation / Alaska Dispatch)

JUNEAU — Spanish major oil company Repsol struck oil three times at three exploration wells the company drilled this winter on Alaska’s North Slope, the company announced Tuesday.

Repsol, which has had two North Slope spills during the last two winters of exploration, didn’t provide specific flow rates. But it said two of the wells “yielded encouraging results for future development.” In the third well, “hydrocarbons were identified at multiple levels.”

The first two wells were called Qugruk 1 and Qugruk 6, while the third was Qugruk 3. All are located between the Kuparuk and Colville Rivers west of Prudhoe Bay in an area Repsol called “a proven system and adjacent to giant and supergiant fields.” Prudhoe Bay and Kuparuk are the two largest oil fields in North America.

Repsol will operate the new wells, with minority partners including Armstrong Oil & Gas, an exploration company that first put together the leases and then brought in the deep-pocketed Repsol to lead the drilling effort.

Repsol didn’t say Tuesday if or when the wells would enter production, adding only that exploration and assessment would continue next winter. Exploration can only be carried out during four months of the year when the ground is frozen.

The company told analysts last year that it hoped to begin production of oil in Alaska by 2015. The prospects it was considering were very low risk, it said, due to the proven nature of the resource-rich area in which it was drilling.

Under the existing Alaska’s Clear and Equitable Share (ACES) oil tax system, exploration companies such as Armstrong and Repsol can get state assistance with exploration and drilling. That system was changed during the just-completed session of the Alaska Legislature to favor production of oil over exploration for new oil.

Repsol in its press release said “recent tax reform passed in Alaska was a critical factor in ensuring the development of this project,” but officials were unavailable Tuesday to explain that statement.

Repsol’s troubled recent history of Alaska oil spills

Earlier this month, Repsol reported its second North Slope spill in two winters, after a hose ruptured during a flow test of an exploratory well, spilling an estimated 6,600 gallons of a mixture containing crude oil and other fluids. “It wasn’t a big event,” Cathy Foerster, a state oil and gas commissioner, said at the time. “They had a hose rupture.”

And last winter, the company suffered a blowout during exploratory drilling after its contractor, Nabors Drilling, hit a gas pocket 2,500 feet down at a nearby well known as Qugruk 2, spewing an undetermined amount of natural gas, water and more than 100,000 gallons of drilling mud — a mixture of water and lubricant that helps clear the hole of debris — onto the snow.

Severe cold weather caused response efforts at that well to drag on for weeks. Also, the Alaska Oil and Gas Conservation Commission revoked permits for two other Repsol wells, requiring that they reassess the potential for gas hazards following the blowout at Qugruk 2.

Contact Pat Forgey at pat(at)alaskadispatch.com

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