New players on the North Slope: some companies willing to take the risk.

• Author: Orr, Vanessa
• Position: OIL & GAS

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As another drilling season gets under way, a number of familiar and not-so-familiar faces are staking a claim on Alaska's North Slope. Even as the amount of oil produced in the area continues to decrease at a rate of 6 percent per year, some companies are willing to take the risk there is still plenty of oil to be had.

REPSOL

In March 2011, for example, Repsol, Europe's fifth-largest oil company and one of the 10th largest oil companies in the world, announced an exploration joint venture with Armstrong Oil & Gas subsidiary 70 & 148 LLC, and GMT Exploration LLC, to explore and develop an area of roughly 2,000 square kilometers on the North Slope. "We think that Alaska is a very attractive area," explained Kristian Rix, deputy director for Media Relations for Repsol. "We believe that there is less exploration risk than in other areas and a greater chance of finding resources."

Repsol, which is privately owned, currently operates in more than 34 countries with its main operations in the U.S. taking place in the Gulf of Mexico. Repsol owns 93 exploratory blocks offshore in the Chukchi Sea and holds a 20 percent stake in 71 offshore blocks in the Beaufort Sea, along with Shell Offshore Inc. and Eni Petroleum. In 2009, studies were performed to determine that area's exploratory potential.

"We have been interested in the United States for some years now, and have also been looking at opportunities in the whole of North America," Rix explained. "Our strategy is to invest more in OECD countries, and we think that in the U.S., Alaska is an exciting area and has a lot of potential which we are willing to go to considerable expense to explore."

Organisation for Economic Cooperation and Development (OECD) countries, which include the United States, Canada, Australia, Japan, the United Kingdom, France, Spain and 27 others, are dedicated to the pursuit and preservation of democracy and the market economy. According to its website, www.oecd.org, one mission of the organization is to create foundations for economic growth that can be sustained long term.

As part of the agreement, Repsol will fund a broad-reaching exploration and development program on leasehold held by 70 and GMT, with Repsol and 70 collaborating on all apects of the program. Repsol's working interest in the transaction will be 70 percent. "It's a fairly simple joint venture; they hold the assets on which we will operate," said Rix. "We have agreed to an investment commitment of at...