Spain’s Repsol halts drilling in Caspian Sea following joint exercises

Sean Coyne, the CEO of Spanish oil company Repsol, said on Friday that the company has halted its work at the Cambo prospect in the Caspian Sea until it can assess the impact of recent military exercises in the region. “Repsol has halted development activity at the Cambo field, which is currently estimated to hold more than 7 billion barrels of crude oil,” Mr. Coyne said in a statement. “It is currently pending the results of studies by the Azerbaijan government.”

The source of the energy is disputed in Azerbaijan. A source familiar with the situation, who spoke on condition of anonymity because they were not authorized to speak to the media, said the land that Repsol owns onshore next to the field is owned by the State Oil Company of Azerbaijan, and onshore and offshore wells connected to it belong to BP. (The source did not say how much oil was present.) The source added that at the end of last year Repsol cut gas production at the Cambo field in half because of lack of interest from potential buyers. In his statement, Mr. Coyne said the field’s 200 million barrels of oil equivalent has a sale value of about $1 billion.

The Repsol statement suggests the moratorium could affect the enormous potential of the nearby Manafkie field, which Repsol and Azerbaijan agreed in June to extend until April, while commercial negotiations take place. In a statement, Baku-based SOCAR made clear that both fields will be subject to equal sanctions.

“All activities related to the development of these fields are subject to the same sanctions. However, SOCAR is ready to stop production temporarily in case production decisions are taken due to lack of market demand. This is nothing new and we have managed to do this during the previous contract,” SOCAR said.

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