May 7 (Reuters) - Oil and gas producers Santos

and Repsol are exploring a sale of a minority stake in

oilfields in Alaska they jointly own and develop in a deal that

could be worth about $1 billion, according to people familiar

with the matter.

The oilfields include the Pikka project, which is one of the

largest oil prospects in Alaska and has been valued at about

$4.5 billion by consultancy firm Rystad Energy.

The companies are working with an investment bank to jointly

sell minority stakes in Pikka, alongside partial interests in

the Horseshoe and Quokka fields that are located in the North

Slope region of Alaska, the sources said, requesting anonymity

as the discussions are confidential.

Repsol and Santos declined to comment.

The stakes are so-called non-operating positions, meaning

the owner gets a share of the proceeds from the sale of

hydrocarbons without needing to undertake any drilling or be

involved in operations. They are required to contribute to their

share of costs.

Potential buyer interest will likely be impacted by factors

including legal and environmental risks, the sources said,

cautioning a deal is not guaranteed.

There are outstanding legal actions related to access to

roads in an oilfield neighboring Pikka that is owned by a unit

of ConocoPhillips ( COP ), the largest operator in the North

Slope.

North Slope projects have also faced heavy opposition from

indigenous residents and conservation groups, who sought to

block Conoco's Willow project without success.

"In terms of a potential buyer (for Pikka), it would be very

challenging to attract a buyer other than ConocoPhillips ( COP ) as of

now," said Atul Raina, vice president of upstream M&A analysis

at Rystad. Other large operators in the region are focused on

assets that are already developed and producing oil, Raina

added.

Conoco had previously held talks to buy a 15% stake in Pikka

when it was controlled by Oil Search, an Australian energy firm

that was acquired by Santos for $6 billion in 2021.

Those initial talks ended because Oil Search refused to give

up its operator rights. It is not clear if Conoco would be

interested in the stakes in the Alaska oilfields that are

currently for sale.

Conoco declined to comment.

The Pikka project initially struggled to get off the ground,

due to the technical challenges of operating in Alaska and was

eventually greenlit in 2022. Santos said last month that it

remained on track to get the field under production in 2026.