The oil company will receive 4,800 million euros for the entry of the US fund into this activity after the rises in crude oil in recent months
Repsol has sold 25% of its oil exploration and production business to the US fund EIG for 4.8 billion euros. In this way, the company indicates that it manages to "promote the transformation into a multi-energy company, reinforce its leadership in the energy transition and advance the fulfillment of key objectives of the strategic plan" by incorporating its exploration and production business. ('upstream')
EIG is an American institutional investor specializing in the global energy and infrastructure sectors. The operation involves valuing this Repsol business at around 19,000 million euros. The agreement even contemplates the possibility of an IPO of a minority stake in the United States of this business from the year 2026, provided that favorable market conditions are met.
Repsol has taken advantage of the rise in the price of oil on the international market as a result of the war in Ukraine and the sanctions against Russia, a movement that has pushed up the market. The barrel of Brent dawns this Wednesday at around 93 dollars, although it far exceeded 120 dollars at the beginning of the summer, compared to just over 60 where it was a year ago.
The company clarifies that in this way it advances the fulfillment of acceleration objectives in the energy transition, with flexibility and ambitious and profitable business growth, financial strength and shareholder remuneration "located among the best in the sector and on the Ibex-35", explained in the relevant fact sent to the CNMV.
Its strategic plan contemplates the entry of partners or investors in some businesses to accelerate the achievement of objectives and maximize the return of the company's operations. It has already deployed an operating model of four business areas (Upstream, Industrial, Client and Low Carbon Generation), in a framework of growing shareholder remuneration and with a volume of investments mainly oriented towards the goal of zero net emissions in 2050.
Repsol, as the majority shareholder, will maintain control of the exploration business, 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 president of the new company, who will have a casting vote. EIG will nominate two and the other two will be independent.
The company created will maintain the existing staff and management team, as well as the current business plan, focused on strengthening, targeting and decarbonising its asset portfolio. EIG will contribute its experience in previous investments in the global energy sector to maximize value creation and enhance the strengths of Repsol's upstream unit. The new entity will adopt the ESG objectives and policies that Repsol has for its exploration and production area, reinforcing them with the EIG standards.
EIG is an institutional capital investor specialized in energy and infrastructure and committed to applying the best ESG practices in its portfolio. With four decades of experience and a long-term track record in energy investment, 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 pioneering agreement reinforces the strategic direction of the Upstream unit within the Group and, at the same time, drives the transformation of the company and its multi-energy profile to achieve zero net emissions by 2050", said Josu Jon Imaz, CEO of Repsol .
"The energy transition determines all the decisions we make and we are delighted to partner with a global leader such as Repsol in this attractive opportunity to lead change in our industry," said R. Blair Thomas, President and CEO of EIG.