Repsol Given Rules for Oil Drilling Off Canary Islands

Spain’s government set rules for Repsol SA (REP) to explore for oil off the Canary Islands, noting that the $10 billion project drew opposition from almost 12,000 people and institutions over its environmental risks.

The main safeguards imposed to avoid major environmental damage such as a spill were largely those that the Madrid-based company had proposed for itself, according to a 41-page regulation published today. The government had already said on May 29 that it would clear the exploration plans.

One requirement calls on Repsol to employ blowout preventers, devices to avoid spills, when it drills the two or three deepwater exploratory wells now approved off the Canary islands of Lanzarote and Fuerteventura. Should it strike oil, Repsol has said it will invest about 7.5 billion euros ($10.2 billion) in developing the fields.

The project, frozen for 12 years in court challenges and administrative reviews, is moving forward under a government that’s trying to revive fossil-fuels development in a country highly dependent on imports of oil and gas.

In 2012, the government restored Repsol’s original permit from 2001. A torrent of opposition followed from ecologists and local government officials in the island communities off the West African coast, one of Spain’s major tourist destinations that’s known for biodiversity. Waters off the islands are rich in sealife including 30 varieties of whales, as well as dolphins and turtles.

Photographer: Desiree Martin/AFP via Getty Images

Protesters take part in a demonstration against the exploration for oil and gas off the coast of the Canary Islands, in Santa Cruz de Tenerife, on the Spanish Canary island of Tenerife, on June 7, 2014. Close

Protesters take part in a demonstration against the exploration for oil and gas off the... Read More

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Photographer: Desiree Martin/AFP via Getty Images

Protesters take part in a demonstration against the exploration for oil and gas off the coast of the Canary Islands, in Santa Cruz de Tenerife, on the Spanish Canary island of Tenerife, on June 7, 2014.

Challenges Continue

Some 11,840 people signed documents that were sent to the government opposing the drilling, according to the resolution today. Public comment on Repsol’s 2013 environmental-impact study was required under Spanish law.

“A great number of the arguments were of the opinion that the environmental impact study’s contents are insufficient and highly vague, thereby underestimating the impacts,” according to the resolution signed by Deputy Minister Federico Ramos.

Challenges to the project are continuing. Spain’s Supreme Court today began to hear cases contesting the exploration permit. A decision is unlikely today, a court spokesman said. Final approval is still needed by Spain’s Industry Ministry.

Abel La Calle, an environmental law attorney who is advising Fuerteventura’s local government, said he was surprised that the government relied so heavily on safeguards proposed by Repsol.

“This is unheard of,” La Calle said in an interview. “The government came up with recommendations for safety, but they’re not legal obligations. We’ve never before seen that happen with a project that carries a risk of a catastrophic accident.”

Spill Scenario

Four recommendations were made by the government, in addition to requirements on waste water, nature reserves and fishing resources.

The government studied two scenarios. The first, for environmental impact of activities that definitely will take place during drilling, and the second for impact from a possible spill or other accident. The government cleared the project under the first scenario, with a “favorable” finding, and didn’t specifically rule on impacts under the second.

Spokesmen at the environment ministry referred questions to today’s resolution itself. A Repsol spokesman didn’t have any immediate comment.

To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net

To contact the editors responsible for this story: Timothy Coulter at tcoulter@bloomberg.net Robin Saponar

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