The Ministry for the Ecological Transition takes measures for the definitive closure
The Ministry for the Ecological Transition has decided to take measures for the definitive closure of the ‘Lora’ oil concession, located in the province of Burgos. This decision is due to the fact that the company holding the concession of the field declared bankruptcy, leaving the oil exploitation incomplete.
By publishing an order in the Official State Gazette (BOE), the Government has exercised its power to subsidiarily execute the definitive closure of the oil field wells and the dismantling of the facilities. This forced execution is carried out due to the failure of the concession company, the Sedano Oil Company, to comply with its obligations in relation to the abandonment and dismantling of the field.
Closure and dismantling process
The order establishes that the necessary actions be urgently carried out to evaluate the current state of the facilities, update the closure plan and carry out the corresponding tasks. All this will be the responsibility of the concessionaire company.
The ‘Lora’ hydrocarbon exploitation concession was granted in 1966 to Campsa, California Oil Company of Spain and Texaco Spain. However, in January 1999, the owners partially renounced the concession. Subsequently, in November 2008, the Sedano Oil Company became the sole owner and operator of the field.
After the configuration of the Sedano Oil Company as the owner, a closure plan was established that consisted of two phases. The first phase, which has already been carried out, consisted of the partial dismantling of the facilities. The second phase, which has not yet been completed, involves the definitive closure of the field’s wells and the dismantling of the remaining facilities.
Lack of compliance and declaration of bankruptcy
In October 2018, the Secretary of State for Energy urged the concessionaire company to carry out the second phase of closure, but there was no response from it. In October 2021, the Commercial Court number 1 of Burgos declared bankruptcy of the Sedano Oil Company, which led to the appointment of a bankruptcy administration.
Since then, the company has not complied with its obligations to close and decommission the ‘Lora’ field. Therefore, the Ministry has initiated the procedure to subsidiary execute these tasks, which will be borne by the company in bankruptcy.
The legacy of ‘Lora’
The ‘Lora’ oil exploitation was the first in Spain and the only one in the Iberian Peninsula on solid ground. At its peak, it had 52 wells that produced more than 5,000 barrels a day. However, due to low crude oil quality and declining production, only ten wells remained active at the time of its closure.
The closure of ‘Lora’ marks the end of an era in the Spanish oil industry. Although its production was no longer significant, the site was known as the ‘Texas of Burgos’ due to its historical importance. Now, the Government will be responsible for carrying out the definitive closure and dismantling of the wells and remaining facilities.
