The oil company will receive €4,800 million for the US fund’s entry into this activity after crude oil surges in recent months
Repsol has sold 25% of its oil exploration and production activities to the US fund EIG for 4.8 billion euros. In this way, the company indicates that it succeeds in “promoting the transformation into a multi-energy company, strengthening its leadership in the energy transition and advancing the achievement of the key objectives of the strategic plan” through its exploration and production activities in to take. (‘upstream’)
EIG is an American institutional investor specializing in the global energy and infrastructure sectors. The operation means that this Repsol company is valued at approximately EUR 19,000 million. The agreement even provides for the possibility of an IPO of a minority stake in the United States of this company from the year 2026, provided that favorable market conditions are met.
Repsol has benefited from the rise in the price of oil in the international market as a result of the war in Ukraine and the sanctions against Russia, a move that has boosted the market. The barrel of Brent is challenging this Wednesday at about $93, although it was well above $120 at the start of the summer, compared to just over $60 a year ago.
The company clarifies that in this way it promotes the achievement of acceleration targets in the energy transition, with flexibility and ambitious and profitable business growth, financial strength and shareholder compensation “located among the best in the industry and on the Ibex-35”, stated in the relevant fact sent to the CNMV.
The strategic plan provides for the entry of partners or investors in some companies to accelerate the achievement of the objectives and maximize the return of the business. It has already implemented a business model of four business areas (Upstream, Industrial, Client and Low Carbon Generation) within a framework of growing shareholder compensation and with an investment volume mainly focused on the target of zero emissions by 2050.
Repsol, as the majority shareholder, will retain control of the exploration activities, which it will continue to consolidate within the group’s accounts. In addition, he will appoint four of the eight members of the board of directors, including the chairman of the new company, who will have a casting vote. EIG will nominate two and the other two will be independent.
The established company will retain its existing workforce and management team, as well as its current business plan, aimed at strengthening, targeting and decarbonizing its asset portfolio. EIG will bring its experience of past investments in the global energy sector to maximize value creation and enhance the strengths of Repsol’s upstream unit. The new entity will adopt Repsol’s ESG objectives and policies for its exploration and production area and reinforce them with the EIG standards.
EIG is an institutional capital investor specializing in energy and infrastructure and is committed to adopting the best ESG practices in its portfolio. With four decades of experience and a long track record in energy investments, including upstream and energy infrastructure, EIG has invested more than $41.5 billion in the energy sector in 38 countries.
“Our ambition is to lead the energy transition. This landmark agreement strengthens the strategic direction of the Upstream unit within the Group while driving the transformation of the company and its multi-energy profile to reach zero net emissions by 2050,” said Josu Jon Imaz, CEO of Repsol. .
“The energy transition shapes all the decisions we make and we are excited to partner with a global leader like Repsol in this compelling opportunity to lead change in our industry,” said R. Blair Thomas, President and CEO of EIG.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
