Repsol has reached an agreement of good intentions with the Canadian company New Stratus Energy for the sale of assets in Ecuador. So the Spanish oil and gas group will leave the South American country, where it has been present for almost twenty years.
Specifically, the agreement will mean the acquisition by the Canadian firm of an indirect participation of 35% in the service contracts for blocks 16 and 67, located in the province of Orellana. Also an indirect participation of 29.66% in Oleoducto de Crudos Pesados Ecuador (OCP), according to New Stratus Energy.
The closing of the operation depends on the approval by the Ecuador Government and regulatory authorities, as well as the compliance with the usual conditions for the transaction. The deal amounts to about $5 million (about € 4.2 million) to be paid in two installments. However, there could be additional contingent payments linked to certain circumstances, such as an extension of the service contracts term. This would bring the figure to $12 million (about € 10.1 million).
The operation is part of Repsol’s strategy to make its upstream portfolio (Exploration and Production) more flexible to prioritize value. In fact, in recent years the energy group has divested assets in Romania, Angola, Papua New Guinea, amongst others, within this plan of abandoning countries or assets where it had lower margins or expectations.