Repsol 'Totally Redeems' Itself With 15th Discovery This Year

Remember that winter of discontent when Repsol YPF downgraded its proved reserves by 25 percent? The Spanish company’s recent spate of oil and natural gas discoveries have helped erase those bad memories.

If Repsol manages to keep this up, we might just forget about its Argentina problem too. The company has been a part of more than a dozen oil and gas discoveries this year including offshore Brazil, Venezuela and Sierra Leone.

The energy company is also planning to invest $1.6 billion in an effort to boost Bolivia’s natural gas output, Reuters reported late Wednesday.

Brazil, Sierra Leone, Venezuela and Bolivia all hold varying levels of risk for a company like Repsol. The energy company has some experience dealing with politically unpredictable countries. Just three years ago, Bolivian President Evo Morales seized the country’s oil and gas fields and refineries from foreign companies. Morales nationalized Bolivia’s oil and gas industry and in late 2006 negotiated new contracts with some foreign companies including Repsol and Petrobras.

Repsol, once crippled by depleted reserves, is willing to take on the risk in hopes of hitting it big. And so far, that strategy is paying off.

Here are just a few of Repsol’s successes in the past two quarters:

• Lucky No. 15: The Venus well located offshore Sierra Leonewas drilled to a depth of 18,500 feet in water 5,900 feet deep. Repsol holds a 25 percent stake in the block. Anadarko Petroleum, the operator, holds 40 percent, Woodside has 25 percent and Tullow holds a 10 percent stake.
• And just a day before: The Abare West wellin the Santos Basin, a deepwater pre-salt region located offshore Brazil. Repsol has a 25 percent stake in the well located in block BM-S-9, which as BNET noted earlier has been especially fruitful.
• Last week: Pearl 1 well, which Repsol holds a 50 percent stake in a partnership with Eni, discovered natural gas in a reservoir located in the Gulf of Venezuela. The well could hold between 7 and 8 trillion cubic feet of gas. Venezuela’s state-owned PDVSAwill have a 35 percent stake in the development phase, with Eni and Repsol each keeping 32.5 percent.
• Tests on the Guara well indicate estimated recoverable volumes of between 1.1 and 2 billion barrels of light crude and natural gas.
• Two new wells in Spain’s Mediterranean waters discovered in July are expected to produce oil between five and seven years, which will help extend production from that area.
• Its third discovery in the Santos Basin in 2009: The Panoramix wellis located in shallow waters of the Santos Basin. Repsol is the operator with a 40 percent stake and its partners include Petrobras, 35 percent; Vale, 12.5 percent; and Woodside with 12.5 percent. Repsol had reported in January traces of hydrocarbons were found. The find in May confirmed the gas potential, which indicated a possible maximum flow of 850,000 cubic meters a day.