A restructuring of Repsol’s Alaska drilling project is adding to the state’s woes in the midst of the biggest oil slump since 2009.
Repsol sold stakes in development and exploratory acreage in northern Alaska to its partner, Armstrong Oil & Gas Inc., for more than $800million, according to a statement from Armstrong. The companies will defer the 2015-2016 drilling campaign initially scheduled to start this winter as part of the restructuring.
As many as 500 workers on the state’s North Shore could lose their jobs in the restructuring, according to Anchorage, Alaska-based KTUU television station, citing comments from Repsol spokeswoman Jan Sieving.
The restructuring comes a month after ConocoPhillips announced it would cut about 10% of its workforce, including 120 jobs in Alaska.
The state has been hit hard by crude prices falling more than 50%t from last year’s peak amid a global glut. Petroleum revenue in the 2014 fiscal year was $4.8billion and accounted for 88% of the government’s unrestricted funds. That’s expected to fall to $1.7billion this fiscal year. The government had a partial shutdown for 12 days in June related to budget shortfalls.
Representatives of Repsol and Armstrong didn’t immediately return calls an e-mails for comment last night.
Once all options are executed in the deal, Repsol’s stake in the Colville River Delta area will shrink to 49% from 70 percent, and in another 750,000 acres of development land to 25%from 70%, with Armstrong taking 51% and 75%, respectively.