Spain’s Burgos is back on the oil business

By Carlos Díaz Güell, in Madrid | In 1963, during general Franco’s regime, oil was discovered in Spain in the northern province of Burgos –in Valdeajos, in an area known as La Lora. From Ayoluengo, towards the end of the 1980s, 2,500 barrels of oil were extracted per day (125,000 tons of oil per year). From here, production began to decline drastically and exploitation and ownership changed hands. Oil prices did not let make a profit from the approximately 80 wells that were active.

Today, things seem to have radically changed. This is the opinion of Sedano Oil Company (CPS in Spanish), a subsidiary fully owned by Leni Gas and Oil (LGO), which, as reported by the company itself, maintains profitable extraction operations in the Gulf of Mexico, Trinidad, Malta and Hungary as well as Spain.

By its calculations, the reserves amount to 93 million barrels (13.30 million tons). The company intends to reach an output of 5,000 barrels of oil per day in 2012 (equivalent to more than 250,000 tons of oil per year). The results obtained in 2010 and 2011 guarantee forecasts. The little known CPS may yet pull high rates of profitability from an until recently abandoned field that Repsol sold to US’s Chevron in 2002 due to its frustration with not being able to make it worth the investment. Not any more.

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.

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