Page 12 - EurOil Week 36 2022

EurOil PROJECTS & COMPANIES EurOil

Repsol sells quarter-stake in entire

upstream business for $4.8bn

SPAIN REPSOL has reached a deal to sell a quarter stake set to reach 590,000 boepd in the second half of
in its entire global upstream business to energy this year, of which 70% will be natural gas, sup-
Repsol says the funds sector investor EIG for $4.8bn, as the Spanish oil ported by 2.3bn boe in reserves as of December
will help it drive forward major looks to raise capital to fund its transition 31, 2021.
its energy transition to cleaner energy. EIG, one of the biggest private equity inves-
strategy. The transaction values Repsol’s upstream tors in the oil and gas industry, founded Harbour
operations at around $19bn in total – a signifi- Energy in 2014, which has since become the big-
cant sum considering that the company’s over- gest producer in the UK North Sea.
all market capitalisation today stands at only “Energy transition informs every deci-
$19.4bn. Repsol said the sale would “crystalise sion we make, and we are thrilled to partner
value” in the business, which produces almost with a global leader of Repsol’s stature on this
570,000 barrels of oil equivalent per day in compelling opportunity to lead change in our
Europe, the Americas, Asia and Africa, while industry,” EIG CEO R. Blair Thomas said in a
freeing up funds to ramp up its investments in statement. “Evaluation of ESG impact is inte-
renewables. grated into EIG’s core investment and port-
“Our ambition is to lead the energy transi- folio management functions, and we look
tion,” CEO Josu Jon Imaz commented. “This forward to working with Repsol, a world-
pioneering agreement allows us to maintain the class operator and energy transition leader,
strategic direction of the upstream unit,” while to continue building the business’ ESG best
supporting the “transformation of the company practices.”
and its multi-energy profile to achieve zero net Repsol has vowed to reduce the carbon inten-
emissions by 2050.” sity of its upstream business by three quarters by
Repsol was among the first major oil and gas 2025 versus a 2016 baseline.
companies to declare a net-zero-by–2050 ambi- “As the world looks to meet the twin goals of
tion at the end of 2019, and has since focused decarbonisation and reliability, we believe this
on scaling up its wind, solar and hydroelectric partnership is well positioned to help meet the
power capacity in Spain, the US and Chile. growing global demand for accessible, efficient
In its latest strategic update in October last and safe energy,” Thomas said.
year, Repsol increased its 2030 target for renew- Repsol’s sale marks the first time a major oil
able energy capacity by 60%, while also setting and gas company has cashed in on the value of its
new targets to limit emissions from its oil and gas entire conventional business, and could prove an
business. The company currently plans to have example for others to follow. By retaining opera-
20 GW of renewable capacity up and running by tional control of the business, Repsol added that
the end of the decade, versus the previous target the deal would also lay the groundwork for an
of 12.7 GW. initial public offering at the business in the US in
Production at Repsol’s upstream business is 2026 or later. ™

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