On Thursday, Repsol S.A., a major Spanish global energy company, announced that they have just found a new oil field in Alaska. This major discovery has high chances to lead to a revitalization of a recently declining production in the state. In light of this important event, Alaska lawmakers used this opportunity to open the chapter of oil taxes and credits once again.
The Spanish company Repsol S.A. stated that the discovery was the result of two exploration drills that took place this winter. The operations were in collaboration with Armstrong Oil & Gas Inc. a partner of the company with its headquarters in Denver, Colorado. The first round of inspections of the new oil field suggests that the location has the total capacity of 1.2 billion barrels of oil.
Repsol continued the statement by announcing that the first activity at this new site can start to unravel as soon as the year of 2021. Once the production starts, the company will be able to extract even 120,000 barrels of oil each day. This would mean a major revenue boost for the state of Alaska. The county had to deal with decreased oil revenues since 2014 when the prices dropped all of a sudden. Alaska also has to sustain the oil flowing through its Trans-Alaska Pipeline System.
Bill Walker, the Alaska Governor, responded to the recent discoveries with a positive message. He reminded that the oil pipeline is already three-quarters empty and the new oil field can solve this problem. The new site needs expensive, new pipeline to get ready for the 2021 opening. On the other hand, the location is near other operating companies which can support part of the infrastructure.
There was a second major such discovery in October. The closely held firm, Caelus Energy LLC, tracked down 2.4 billion barrels of oil in the waters of Smith Bay. This place is only 300 miles north of the Arctic Circle. The authorities are also preparing this site for future production. These two achievements are a great gain for the industry. It is probably the biggest event for oil companies in the last 30 years.
While the announcement was met with joy by Governor Bill Walker, other politicians are considering new regulations. The state is facing a multibillion-dollar deficit in its budget. Thus, lawmakers are deciding whether or not to cut down on incentives for oil activity.
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