EIG, a U.S. institutional investor in the global energy and infrastructure sectors, will acquire 25% of the upstream business for $4.8 billion (€4.8 billion). This transaction, approved by the Board of Directors of Repsol, values the upstream business at $19 billion (€19 billion), which exceeds analysts’ consensus valuations of the unit. The agreement between Repsol and EIG includes the possibility of listing a minority stake of the business in the United States from 2026 onward, subject to favorable market conditions.
Repsol, as majority shareholder, will retain control of the upstream business, which will continue to be consolidated within the accounts of the Repsol Group. Repsol will appoint four directors to the eight-person board, including the chairman with a casting vote. EIG will appoint two board members and the other two will be independent directors.
Repsol´’s Strategic Plan contemplates the inclusion of partners or investors in some businesses to accelerate the achievement of objectives and maximize the return of company operations.
The plan deployed an operating model of four business areas; Upstream, Industrial, Client and Low Carbon Generation in a framework of increasing shareholder remuneration with investment oriented to achieving zero net emissions by 2050.
EIG is a provider of institutional capital to the global energy and infrastructure sectors and committed to influencing ESG industry best practices across its portfolio. With four decades of industry experience and a long-term track record of investing capital in energy, including upstream and energy-related infrastructure, EIG has committed more than $41.5 billion to the energy sector across 38 countries.
“Our ambition is to lead the energy transition. This pioneering agreement 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 to achieve zero net emissions by 2050,” said Repsol CEO Josu Jon Imaz.
Global Upstream Portfolio
Repsol will produce an average of approximately 570,000 barrels of oil equivalent per day in 2022 and has proven and probable reserves of 2.3 billion barrels of oil equivalent, of which nearly 70% is gas.
The portfolio of upstream assets is made up of strategic areas in North America (U.S., Canada, Mexico), South America (Brazil, Peru, Bolivia, Trinidad and Tobago, Colombia and Venezuela), Europe (Norway, UK), North Africa (Algeria, Libya), and Asia (Indonesia).
Since 2020, Repsol has made 13 discoveries, with total gross resources of more than 900 million barrels of oil equivalent, mainly in the United States and Mexico.
The transaction is expected to close within the next six months once the corporate structure of the upstream business has been concluded, subject to customary regulatory approvals.
