Repsol sells 25% of its exploration unit, accelerating transformation – zimo News


On Wednesday, Spanish oil group Repsol sold a 25% stake in its hydrocarbon exploration and production unit for $4.8 billion to fund investments in the renewable energy sector, accelerating the transition to a “multi-energy” model.

The group announced in a press release that, after weeks of negotiations, it had reached an agreement with US investment fund EIG to acquire a “25% stake” in Repsol’s “exploration and production division (upstream)”.

As the majority shareholder, Repsol will retain control of this business unit, which operates deposits in South America (Brazil, Peru, Venezuela, etc.) or North Africa (Algeria, Libya) and should produce 570,000 barrels of oil equivalent per day this year .

The agreement, which values ​​the upstream arm at $19 billion, also provides for a possible IPO of the activities “from 2026, if market conditions are favourable,” the group’s a priori rule in the United States. European hydrocarbon heavyweight.

Thanks to the new agreement, “Repsol will achieve the key objectives of its 2025 strategy faster than expected, based on accelerating the Group’s energy transition”, as the Spanish giant aims to become a “multi-energy “.

The plan was presented at the end of 2020, in particular with an investment of 18.3 billion euros by 2025. The goal is for the group to gradually switch to renewable energy, or “green hydrogen” (produced using renewable energy), to achieve “net-zero emissions” of carbon dioxide by 2050.

Several other countries such as the European Union, Japan, and many companies have chosen the date 2050 to achieve carbon neutrality.

– Investment in renewable energy –

This is the second major move by Repsol in less than three months, which in mid-June announced the sale of 25% of its renewable-focused arm to Crédit Agricole Assurances and Swiss fund Energy Infrastructure Partnership (EIP) 905 Millions of euros.

The move, again aimed at increasing the oil group’s investment capacity in so-called “low carbon” energy sectors, should be completed in the fourth quarter, according to the Spanish group.

Funds recovered as part of the strategy will allow Repsol to “finance” the group’s “important projects” for “the coming years”, related to the “decarbonization” of the economy, the director-general highlighted in a video. Repsol, Josu Jon Imaz.

However, Mr Imaz said the Spanish group would not leave the oil and gas sector as these sources were “necessary” for an “orderly” energy transition. But “we need to reduce the carbon impact of our products,” he insists.

In recent months, Repsol’s announcements of projects in the renewable energy sector have multiplied, particularly solar and wind, with a capacity of 3.8 GW by the end of 2021. Its target is to reach 15 GW by 2030.

On the Madrid stock exchange, Repsol shares were steady at 11:00 GMT, with the market down 0.15%. In a report, investment bank RBCCM judged the agreement with EIG to be “positive” as it could “support Repsol’s long-term strategy in renewable energy”.

Most oil groups, such as France’s TotalEnergies, UK’s BP or Anglo-Dutch Shell, have been active in the renewable energy sector to varying degrees in recent years.

However, NGOs and scientists, who for years have called for a drastic reduction in the use of fossil fuels to combat global warming, see the transition as too slow.

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