November 30, 2020

Repsol sells its scarce assets in Ecuador


Madrid

Updated:

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Repsol has reached an agreement of intent with the Canadian New Stratus Energy for the sale of assets in Ecuador, with which the oil company will leave the South American country, where it had been present for almost twenty years.

Specifically, the agreement will entail the acquisition by the Canadian company of an indirect stake of 35% in the service contracts for blocks 16 and 67, located in the province of Orellana, as well as an indirect stake of 29.66% in Oleoducto de Crudos Pesados ​​Ecuador (OCP), reported New Stratus Energy.

The closing of the operation depends on the approval of the Ecuadorian Government, the regulatory authorities and the fulfillment of the usual conditions for the closing.

The amount of the operation amounts to about 5 million dollars (about 4.2 million euros) to be paid in two installments, although there could be additional contingent payments linked to certain circumstances, such as an extension of the term of the contracts. service, which would make him reach up to 12 million dollars (about 10.1 million euros).

Beyond the amount, the operation is part of Repsol’s strategy of active management and flexibility of its upstream portfolio (exploration and production), in order to prioritize value.

In fact, in recent years the energy group chaired by Antonio Brufau has divested assets in Romania, Angola, Papua New Guinea, among others, within this strategy of leaving countries or assets in which it had lower margins or expectations.

Along the same lines, this same year Repsol decided to abandon a joint venture project, together with Russia’s Gazprom and Shell, to explore oil blocks in the Arctic, or to divest itself of its participation in an exploratory block in Bulgaria.

To cope with the impact of the pandemic, the company led by Josu Jon Imaz, which will present its new strategic plan for 2025 on November 26, launched a Resilience Plan to get around this 2020 as best as possible, based mainly on a reduction of operating expenses to 450 million euros and a cut in investments to 1,100 million, with an optimization of working capital by about 800 million euros.

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