Repsol teams up with Santos to invest €2.555 bn in Alaska

RepsolRepsol teams up with Santos in Alaska

Renta 4 . Repsol and Australian oil and gas company Santos will invest 2.555 billion euros in the Pikka project in North Slope Alaska. This field is biggest discovery of oil in the US in thirty years. The Spanish firm’s board has given the green light to the investment, which could increase to 2.952 billion with additional developments on the project. Repsol will have 49% and Santos 51% of Pikka. Each company will have to invest a total of 1.277 billion euros to carry out the initial phase (phase 1) of Pikka, which would begin operations in 2026 with a production capacity of 80.000 barrels per day. Pikka will be an oil project with low emissions, and an carbon intensity index which is one of the lowest in Repsol’s portfolio of projects. Whatsmore, in phase 1, 45 wells will be worked on from one platform. Pikka will be developed in stages, allowing the companies more flexibility when it comes time to invest capital.

Valuation:

1-. Positive. The alliance between Repsol and Santos in the biggest oil discovery in the US means the former will increase its daily production capacity. And this comes at a key time when it will allow the firm to reduce a little further the dependance on Russia. It will also guarantee supply, providing greater energy security to the US, and the OECD, against a backdrop of investments in Upstream at lows in the last decade.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.