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Home News Repsol sells stake in exploration unit to US fund

Repsol sells stake in exploration unit to US fund

Published on 07/09/2022
Published from AFP.com

Spanish oil and gas giant Repsol said Wednesday it has agreed to sell a 25 percent stake in its exploration and production unit to US investment fund EIG for $4.8 billion to boost its energy transition.

The deal will help Repsol finance the planned expansion of its clean energy production capacity such as solar plants and wind farms.

Like other European oil and gas giants, Repsol has been pushing into clean energy in response to growing pressure to reduce the use of fossil fuels and slash planet-warming carbon emissions.

Repsol’s chief executive, Josu Jon Imaz, said the money earned from the sale of the stake will finance “important projects” in the coming years related to the “decarbonisation” of the economy.

The deal “allows us to maintain the strategic direction of the upstream unit and, at the same time, to boost the transformation of the company and its multi-energy profile.”

Repsol’s upstream production division has assets in 14 countries — including Algeria and Brazil — and targets production of 570,000 barrels of oil equivalent per day in 2022.

The transaction values Repsol’s entire upstream unit at $19 billion.

Repsol announced at the end of 2020 that it would invest 18.3 billion euros by 2025 to achieve zero net emissions by 2050 by focusing on renewable energy and green hydrogen.

The company has in recent months announced several new ventures in renewable energy, especially in solar and wind power.





It hopes to boost its renewable energy capacity to 15 gigawatts in 2030 from 3.8 gigawatts at the end of 2021. A gigawatt is roughly the output of one nuclear plant.

In June Repsol agreed to sell a 25 percent stake in its renewable energy unit to Credit Agricole Assurances and Swiss asset manager Energy Infrastructure Partners for 905 million euros.

The funds from that deal would also help the company fund its push into clean energy.

The transaction valued Repsol’s entire renewables unit at 4.4 billion euros, the Spanish energy giant said at the time.

Washington-based private equity firm EIG focuses investments largely on energy and infrastructure globally.

EIG said the deal will allow Repsol to benefit from its knowledge of global debt and equity capital markets.

“We believe this partnership is well positioned to help meet the growing global demand for accessible, efficient and safe energy,” EIG’s chief executive R. Blair Thomas said in a statement.

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