Repsol made net profit of 689 million euros in the first quarter of 2017, up 59% from a year earlier, fuelled by plans implemented to increase the company’s resilience and flexibility against the current backdrop of low prices. Its downstream business was the main driver of its strong first quarter performance.
One of the benefits of the Talisman acquisition for Repsol has been precisely the reduction of geopolitical risk in its Upstream business, given that the lion’s share of its Downstream activity is carried out in Europe.
Carax-Alphavalue | Amongst integrated oil companies, Repsol (Add, Spain) is one of the smallest with a €19bn market cap despite its latest acquisition (Talisman) doubling its size (production seen at 725kbpd by 2020 from 355kbpd in 2014).
If a slowdown started in the Spanish economy for 2017, this would find Spain’s private companies in a healthy situation with regard to their debt: at end-2015, this was below the eurozone average (106.4% of GDP).
Mari Pinardo / Julia Pastor | At the start of this year, Repsol launched an ambitious Strategic Plan to allow the Company to eliminate its debt and weather the storm of low oil prices. The plan includes: divesting non-core assets for a total of 3.100 billion euros via a series of deals, one of which was the possible sale of its Gas Natural stake. The chance came along and on Monday Repsol announced it has agreed to sell 10% of its stake in the gas company for 1.901 billion euros. The operation has been well received by the markets and by analysts.
Repsol and La Caixa, via Criteria, have closed the sale of 20% of Gas Natural Fenosa to the US fund Global Infraestructure Partners (GIP) for €3.803 billion. GIP will now become one of the core shareholders of the energy multinational.
In recent times, hardly anything ever happens in the Spanish stock market. There are practically no IPOs or shareholder squabbles to attract investors’ attention. So when there is even a slight movement, like the possible sale of 20% of Gas Natural by majority shareholders Repsol and La Caixa, it shakes the market up more than normal.
Repsol has doubled its recurrent synergies from 220 million dollars annually to 400, thanks to its purchase of Canadian oil firm Talisman. But the transaction has also resulted in a 5.5 billion dollars arbitration notice being served against it by the Chinese company Sinopec.
Inversis | Spanish oil giant Repsol SA will sell its 42,000 supply points of LPG (Liquefied petroleum gas) at 63 million euros. It plans to divest €6.2 billion in nonstrategic assets and cut spending by 38% “without altering its company profile” as part of its 2016-20 strategic plan.
Carlos Díaz Güell | Without doubt he has been thinking about it for many years, but the chairman of Repsol has waited patiently to show himself in the best light and make friends a few days ahead of today’s OPEC meeting taking place in Vienna, against a backdrop of highly volatile oil prices.