CAPITAL: Madrid
MONETARY UNIT: Peseta
REFINING CAPACITY: 1,315,500 b/cd
OIL PRODUCTION: 13,000 b/d
OIL RESERVES: 14 million bbl
GAS RESERVES: 60 bcf
The Spanish government, seeking to fight inflation, approved measures to speed energy decontrol. Spanish inflation far outpaced the European average in 1999.
The government opened the natural gas distribution network to large foreign firms and acted to increase competition in gasoline distribution, including an increase in the number of distributors and retail outlets.
Separately, a government report said oil companies Repsol-YPF SA and Compania Espanola de Petroleos SA appeared to be illegally fixing prices.
The report responded to a complaint by the Association of Service Station Owners and Supplier Units of Andalusia.
The Economy Ministry`s competition bureau claimed contracts that Repsol and Cepsa had with their owned or leased service stations appeared to fix prices to consumers, ruling out any kind of retail price differentiation.
Those contracts governed supplies to 66% of Spain`s service stations.
GASoline station groups countered that eliminating those contract provisions still wouldn`t induce competition in the market because of the government`s price limits on gasoline.
Repsol denied the charges.
"Repsol believes that what the report says is unfounded in both fact and under the law," a company statement said. "We`re in total disagreement."
Upstream
Repsol-YPF, Spain`s largest oil company, had a discovery near its Casablanca field, 30 km offshore Tarragona in the Mediterranean, that flowed 7,000 b/d of 40∞ gravity oil.
Casablanca is a key source of feed for Repsol`s 180,000 b/d Tarragona refinery.
Chipiron-1 was drilled to 3,590 m MD and 3,388 m TVD. It cut a net interval of 69 m in the basal Tertiary group and the lower Cretaceous. The well didn`t find water-oil contact.
Repsol-YPF said more wells were possible. It planned to install a subsea wellhead connected to the Casablanca platform via a 10-km pipeline.
The firm expected production to begin in early 2001. The oil would be processed in the Tarragona refinery.
The Casablanca platform had been due to be decommissioned in 1999.
The Casablanca complex, which comprises Casablanca, Rodaballo, and Boqueron fields, produced 6,500 b/d.
Natural gas
Spanish demand for gas was expected to increase 7%/year until 2010.
The Industry and Energy Ministry said gas should account for as much as 18% of the energy demand in 2010, up from 12% in 1999.
Private gas consumption would rise about 4%/year in 2000-10, industrial use 2.9%/year, and electricity generation usage 27.7%/year.
The government authorized Endesa SA, Spain`s biggest power company, to sell gas to the country`s 300 largest gas consumers and compete with Gas Natural SDG SA, which controlled about 90% of the market.
Endesa could buy gas outside Spain or from other suppliers, transporting it to clients that use at least 10 million cu m/year. Those potential customers represented 60% of the gas consumption in Spain. Endesa would have to pay Gas Natural a fee to use its pipeline network to distribute the gas.
Spain was licensing foreign and Spanish companies to compete in Spain`s energy markets, hoping that competition would lower prices and stem inflation.
GAS Natural had a virtual monopoly on gas distribution, and newcomers to the market would still depend on the company for transportation service.
The ministry also allowed Comercial Iberica de Gas, a unit of the Spanish holding company Bitrebol, to sell gas to industrial users.
Bitrebol also owned Distribuidora Regional de Gas, Occidental de Gas, and Douro Gas.
The government also licensed Gas de Euskadi, Gas de Asturias, Iberdrola SA, and BP Amoco PLC to compete with Gas Natural.
Repsol-YPF said it would spend $170 million to increase by a third the capacity of its Tarragona refinery in northeastern Spain to meet rising demand for diesel fuel.
The new plant within the Tarragona complex would produce about 900,000 cu m/year of diesel, auto lubricants, and chemicals. It had been making 3 million cu m/year.
