Spanish oil company Repsol SA discovers massive new oilfield in Alaska

Spanish oil company Repsol SA yesterday said that it had discovered a giant oil field in Alaska, a potential find big enough to help stem production declines in the state.

Repsol said it was the largest US onshore oil discovery in 30 years.

It said two wells drilled with Denver-based partner Armstrong Oil & Gas, Inc, indicated that recent discoveries in an area that lay between existing operations in the state's North Slope could hold as much as 1.2 billion barrels of oil.

Repsol added the first production from the field could come as soon as 2021, with output of 120,000 barrels a day. According to commentators, the find could be a lifeline for the state that had seen oil revenues sink after prices crashed in 2014. The state was also in need of additional crude to keep oil flowing on the Trans-Alaska Pipeline System.

"We must all pull together to fill an oil pipeline that's three-quarters empty - and today's announcement shows measurable results of that hard work," Alaska governor Bill Walker said in response to the news of the discovery yesterday.

The Repsol find comes as the second significant find after Caelus Energy LLC's discovery of 2.4 billion barrels of oil, in October, in the waters of Smith Bay, about 300 miles north of the Arctic Circle. The Caelus find would however, require significant investment in a pipeline and other infrastructure to develop the resource.

The Repsol discovery would also require new infrastructure, but it was comparatively close to existing operations of other companies.

The state government however, continues to debate whether to further cut incentives aimed at encouraging oil activity amid a multibillion-dollar state budget deficit.

In a release, House Resources Committee co-chair Geran Tarr, Democrat -Anchorage, said this and other recent oil announcements underscored the  need to finish work on tax credits. According to Tarr, Alaska's credit programme was too generous and unaffordable.