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Welcome news was released by oil companies Repsol and Armstrong Oil and Gas, announcing their discovery of significant onshore oil on Alaska’s North Slope today on the Horseshoe prospect.
While it had been previously announced that light oil had been discovered, Thursday’s announcement extended the Nanushuk Play in the Pikka Unit by approximately 20 miles and increasing the prospect of recoverable oil to 1.2 billion barrels. They anticipate that it will produce approximately 120,000 barrels a day by 2021.
Repsol and partner Armstrong Energy are calling the find the “largest U.S. onshore conventional hydrocarbons discovery in 30 years,” and say that “The Horseshoe-1 and 1A wells drilled during the 2016-2017 winter campaign confirm the Nanushuk play as a significant emerging play in Alaska’s North Slope.”
Governor Walker said in a statement after the announcement, “I applaud the announcement by Repsol and its partner, Armstrong, on their Horseshoe wells discovery. This is also great news for the State of Alaska, which yielded $17 million in our December lease sales. We must all pull together to fill an oil pipeline that’s three-quarters empty—and today’s announcement shows measurable results of that hard work.”
“This announcement is welcome news. Along with other recent announcements of potential new developments this underscores the need to finish our reforms of Alaska’s unaffordable oil industry tax credit system this year,” said Representative Geran Tarr (D-Anchorage), Co-chair of the House Resources Committee. “By correcting our unsustainable system now, we can provide the stability necessary to bring these projects online.”
“New oil has the potential to help the Alaska economy and reverse the downward trend of oil flowing through the Trans-Alaska Pipeline,” said Rep. Andy Josephson (D-Anchorage), Co-chair of the House Resources Committee. “However, these new oil discoveries also have the potential to devastate the budget if we continue a system that requires the state of Alaska to pay billions of dollars in costs with no assurances of future revenue, especially at low oil prices.”
The House Resources Committee is currently examining House Bill 111 to fix Alaska’s overly generous system of subsidizing the oil industry with tax credits.