The recent massive oil finding (over 1.2 barrels worth) in Alaska may bring great relief to the state, as far as money goes. The oil companies in Alaska have been suffering for quite some time now, thirty years to be exact. The newly found oil was found a few days ago in Alaska’s North Slope, which was thought to be barren. The finding was announced on Thursday by Repsol (REPYY) and its privately-held U.S. partner Armstrong Energy.
“The interesting thing about this discovery is the North Slope was previously thought to be on its last legs. But this is a significant emerging find,” Repsol spokesman Kristian Rix told CNNMoney.
They want production to start around early 2021 and they want to produce as much as 120,000 barrels of output per day. The oil resides in a well, which is referred to as Horseshoe. About 75% of that territory is owned by Armstrong, and the rest is owned by Repsol.
Repsol has been trying to find oil in Alaska for the nine years, but to no avail. They have been doing the same thing in The Gulf of Mexico as well.
Alaska had made another oil discovery about six months earlier, in the waters of Smith Bay, by Caelus Energy and private-equity giant Apollo Global Management. They had found between 6 to 10 billion barrels of light oil.
Overall, Alaska will benefit greatly from this new found oil. Last year, they had to stop hiring and limit state travel because of the oil industry. Alaska relies heavily on oil and gas taxes for a majority of its revenue. Due to the lack of oil findings from the oil companies, production has decreased from its major fields, which has caused oil prices to be cut in half. The Trans-Alaska Pipeline System barely gets used. The Governor is very excited about using that again: “We must all pull together to fill an oil pipeline that’s three-quarters empty.”