Page 15 - EurOil Week 48 2020

EurOil POLICY EurOil

Repsol unveils strategy for shifting

from oil and gas to renewables

SPAIN SPANISH energy firm Repsol unveiled its 2021- energy objectives as well as our manufacture of
2025 strategic plan on November 26, announc- products with a low, neutral, or even a negative
The Spanish company ing it would cut back on upstream investment in carbon footprint. We will promote circular econ-
will still spend more on order to plough more into renewables. omy initiatives, develop new energy solutions for
upstream activities, but Repsol’s plans mirror those of other cli- our customers, and boost cutting-edge projects
its focus will shift from mate-conscious oil and gas companies in Europe to reduce the industry’s carbon footprint.”
growing to maintaining such as BP, which is likewise looking to pour
oil and gas production. billions into clean energy in coming years at Harvest mode?
the expense of its traditionally core oil and gas Repsol will still invest more in upstream activ-
business. ities than in renewables during the period,
Repsol aims to invest a total of €18.3bn projecting its total exploration and production
($21.8bn) in 2021-2025, of which €5.5bn spend at €8bn. But this only represents €1.6bn
will be spent on growing its low-carbon busi- in annual investment, compared with €2.4bn in
ness. It also announced a new organisational 2019 and €2.6bn per year in its earlier 2018-2020
structure, in which low-carbon energy will strategic plan.
be one of four main segments. The others are Instead of targeting growth, Repsol’s focus
industrial, consisting of refining, trading and will move to maintaining current oil and gas
wholesale and gas trading; customer, which output. It projects average production at 650,000
includes mobility, retail and energy solutions; barrels of oil equivalent per day over the period,
and upstream. which is the same as its forecast for 2020.
The plan is to expand Repsol’s renewable The company will also scale back exploration
energy generation capacity by 500 MW each spending and continue divesting assets in geo-
year between 2020 and 2025, up to 7.5 GW, and graphical areas where its presence is limited.
then double it to 15 GW by 2030. Repsol also said it would cut a third from its
Achieving these targets will require €1.4bn in dividend in 2021 to €0.60 per share compared
annual investments by 2025, or eight times more with the sum in 2020, to help realise its renew-
than Repsol spent on renewables last year. But able plans. It plans to increase it again by €0.05
the company also expects to generate eight times annually between 2023 and 2025.
more in EBITDA from the business in five years’ Shares in Repsol were down 4.4% by midday
time, or €331mn. Madrid time on November 26 at €8.35 apiece.
Commenting, CEO Josu Jon Imaz said Repsol This brings the overall decline since the start of
was “outlining a profitable and realistic roadmap the year to 40%.
that will allow us to grow, maximise value for our Repsol was notably the first oil major to set
shareholders, and assure the future.” a net-zero emissions target last December, lead-
“Our strategy is based on a multi-energy ing a number of its European peers to follow
offering that combines all the technologies for suit. The company projects that its new strategy
decarbonisation of energy,” he continued. “We is self-financing if Brent averages $50 per barrel
will be more efficient and increase our renewable and Henry Hub gas at $2.5 per mn Btu. ™

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