Repsol: Undesirable Consequences

RepsolJon Josu Imaz CEO of Repsol and Chairman Antonio Brufau

The drop in oil prices and the belief – rarely justified by experience – that things will never be what they were, have begun to set off alarm bells in some of the major sporting activities. These have provided an amazing bounty of triumphs thanks to Repsol’s generous patronage. But the oil major’s future is in doubt, particularly for the owners of the 74% of the company’s shares listed on the Ibex 35, who see how the return on their investment will be significantly reduced.

The matter has once again become the norm after Moody’s and S&P’s decision to affirm Repsol’s credit rating, in the wake of the measures implemented by the company to combat the current oil price scenario. These include cutting its dividend by 38% and significant asset sales.

Repsol’s sponsorship of Spanish motorcycling, now in doubt, has brought both the company and the sport numerous successes. World championship wins and names like Honda, Pedrosa and Marquez stand out. The Spanish oil company and the Japanese firm have an agreement until 2017.

Although Moody’s and S&P’s rating affirmation is good news for Repsol, both agencies maintain their negative outlook. Amongst other factors, they cite the threat from a decline in margins, cash-flow and profits against a backdrop of a strong drop in oil prices.



About the Author

Carlos Díaz Guell
Editor at and, Carlos began his career in financial journalism as founding member of El País. He's been communications director of Bank of Spain, member of the ECC at the European Central Bank, Institutional Relations director at Iberia and editor at La Economía 16 magazine.