MADRID (Dow Jones Newswires), March 7, 2011
Repsol has agreed with two U.S. companies to explore for resources jointly in Alaska and will invest at least $768 million there, as part of a recent push to increase oil production in the U.S. market.
Repsol, which has a strategic objective of increasing its presence in member countries of the Organization for Economic Cooperation and Development, said it plans to acquire stakes in development blocks in Alaska's North Slope. The deal is with GMT Exploration and a unit of Armstrong Oil & Gas Inc.
The blocks are located close to large producing fields and cover an area of 2,000 square kilometers, Repsol said, adding it has "agreed to carry out the investment necessary to explore and evaluate the economic viability of the resources contained in these blocks."
Repsol is already exploring several blocks in the U.S. Gulf of Mexico and produces oil and gas in the Shenzi field there. The Madrid-based company has been shifting resources away from its Argentine operations, long plagued by political interference and falling production rates, and into new markets--but plans to boost exploration in Libya this year have been derailed by violent clashes in the North African country, and may result in more investment in other places.
"The estimated minimum exposure of this investment for Repsol, including amounts to be paid to its partners and the cost of exploration to be carried out over several years, amounts to $768 million," the company said.
The start of exploratory work is scheduled for next winter, Repsol said.
Copyright (c) 2011 Dow Jones & Company, Inc.
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