(adds details, reaction from environmental groups)
By Andrés González
MADRID, June 24 Spanish oil major Repsol
could begin drilling for oil off the Canary Islands
within months after the removal of the last legal hurdle to a
$7-billion oil exploration project on Tuesday.
In 2012, Spain's government granted permits for exploration
off the coasts of the islands of Fuerteventura and Lanzarote,
but they were frozen while courts heard a number of appeals on
Thousands of people marched in different cities and towns on
the islands earlier this month to protest against the plans,
which have been opposed by political parties, unions,
environmental groups and other organizations.
"The seven appeals against the government's royal
decree...have been rejected," a spokeswoman for the Supreme
Court said on Tuesday. The court's written arguments will be
published in the coming days, she said.
Spain produces almost no oil or natural gas and imports all
of its hydrocarbon needs.
Environmental groups including Greenpeace, Oceana and the
World Wildlife Fund - which have campaigned against the oil
exploration plans - decried the ruling, saying a spill in the
area would harm protected species, coral reefs, tourism and
"The game is not over here. The decision of the Supreme
Court affects the exploration drilling where they will detect
whether there is commercially viable oil. Now we're going to
mobilize at a European level against this," said Mario
Rodriguez, director of Greenpeace Spain.
Of the seven appeals rejected by the Supreme Court, one was
from the local Canary Island government, which initially
supported the project but then turned against it.
It was not immediately possible to contact anyone at the
Canary Island government.
Activists argue the exploration could hit tourism, the
islands' main source of income. Greenpeace's Rodriguez said the
potential damages were great compared with returns that he said
would meet Spain's hydrocarbons needs only for two or three
Repsol, which leads a consortium including Australia's
Woodside Petroleum Ltd and Germany's RWE Dea AG
, has said exploration could start in the third
quarter and commercial extraction could begin in 2019 if
findings are positive.
Repsol will spend $350 million on the first two explorations
and would invest $7 billion during the first five years to 2019
The production phase, expected to last 20 years, would
require about $5.2 billion to extract crude oil.
Repsol said on Tuesday it would release a new strategic plan
towards the end of the year, detailing its expected investments.
It estimates the Canary Islands project Sandia (Melon),
which has a probability of geological success of 12 percent to
20 percent, could deliver 330 million barrels of recoverable
resources and project Zanahoria, which has a 14 percent
possibility of success, could deliver 107 million barrels.
(Additional reporting by Fiona Ortiz; Writing by Sarah Morris;
Editing by Elaine Hardcastle)