Aug. 13 (Bloomberg) -- Spain’s government gave Repsol SA final authorization to begin exploring off the Canary Islands, capping the energy company’s 12-year quest for permission to tap what may be the nation’s biggest oil find.
The Industry Ministry approved the project in an Aug. 11 resolution published today in the Official Bulletin. The Madrid-based company won environmental clearance in May from the Popular Party-led government, which is reinvigorating domestic energy exploration that largely withered during past decades.
Should the drilling be successful, Repsol has estimated it will spend as much as 7.5 billion euros ($10 billion) to develop the site in waters near the Canary Islands of Fuerteventura and Lanzarote off Africa’s west coast.
The Spanish company was authorized to drill two or three wells. Its partners are Woodside Energy Ltd. of Australia and German power company RWE AG.
Spain’s largest oil company was held up for more than a decade by environmental challenges and delays by successive governments. Repsol has said it expects to begin work before year-end. Geologists have estimated the area between the Canaries and Morocco may hold enough petroleum to supply about 10 percent of national demand at full production levels.
Repsol’s plans incited one of Spain’s more vigorous environmental opposition movements, lasting years and being fought to the level of the Supreme Court. Protests have swelled in the last year, with 150,000 to 200,000 people joining a June 7 demonstration alone, in every Canary island, according to a local press reports.
The project has been rejected by local governments and community groups in the islands, which count tourism as one of their most important industries and have said they fear a major oil spill that will drive away visitors.
Repsol shares were little changed in Madrid trading at 18.06 euros as of 5:02 p.m. local time. The benchmark IBEX 35 was 0.4 percent higher.
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