Drilling for oil off the Canary Islands is expected to get under way before the end of the year following Spanish government approval to a Repsol led consortium for a controversial €7.5Bn oil exploration project.
The permission is for sinking three exploratory wells at sites some 60 kilometres east of the island of Fuerteventura. Repsol says the project could supply over 100,000 barrels of oil a day, equivalent to 10% of Spain’s energy consumption.
The Spanish government is keen to reduce its energy imports – some €40Bn a year – and originally gave permission for exploration in 2012. Challenges from environmentalists and others including the Canary Islands regional government led to delays but the Spanish Supreme Court rejected these in June this year.
Spain’s industry, energy and tourism minister José Manuel Soria said on Wednesday that the government had taken the environmental issues into account before agreeing the exploration licences. He said: “We have studied all the arguments that have been presented and, as they do not affect the content of the authorisation, we have proceeded to the signing of the resolution.”
Canary Islands politicians fear that the project will damage tourism, which earned the islands over €11Bn in 2013. The project holds out the prospect of creating between 3,000 and 5,000 direct and indirect jobs for the Islands if oil is found.
The terms of the licence requires the consortium, which also includes Woodside of Australia and Germany’s RWE, to take out an insurance policy for €40M and deposit €20M in collateral to cover possible environmental and other damages at the drilling sites.
Seismic monitoring will also have to be undertaken and drilling halted if an earthquake above 4.5 on the Richter scale is detected within 75 kilometres of the sites.
