Spain's Repsol to lose 1.2 bn euros in 2015 due to oil price plunge

28th January 2016, Comments 0 comments

Spain's oil giant Repsol has announced it has put aside an exceptional provision of 2.9 billion euros ($3.2 billion) due to a plunge in crude prices that will lead to a net 2015 loss of 1.2 billion euros.

The past few months have been trying for companies and countries which produce oil and other commodities, the prices of which have slumped as demand has slowed in China -- the motor of global growth in recent years -- casting a cloud over the global economic recovery.

"In the current environment of low crude oil and gas prices, the board of directors of Repsol has agreed... to apply extraordinary impairments totaling approximately 2.9 billion euros to its 2015 earnings," the company said in a statement late Wednesday.

Repsol, which acquired Canada's energy firm Talisman last year, added in its 2015 earnings preview that the group would register an annual net loss of 1.2 billion euros as a result of this exceptional charge.

It added that without the provision, the group would have made a net profit of 1.85 billion euros last year -- an eight-percent rise from 2014.

Shares in the oil giant nevertheless rose 6.4 percent to 9.40 euros around midday Thursday.

Analysts at equity research company AlphaValue said the adjusted net profit of 1.85 billion euros was above their expectations, "driven in our view by refining and strong cost cutting on Talisman."

"We appreciate the latest pro-active decision taken by the group. Statoil and BP are in the same mood," they added.

BP announced earlier this month that it would slash 4,000 posts globally over the next two years in response to the collapsing oil prices.

The British energy giant had already cut 4,000 jobs last year as it prepared for a prolonged period of low prices.

Norwegian oil major Statoil, meanwhile, has also had to tighten its belt, cutting its investments in 2015.

© 2016 AFP

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