Repsol to cut upstream investments in 2021-2025

Spain's integrated Repsol is planning sharp cuts to investments in its core upstream business in 2021-2025 while maintaining production, to focus on low-carbon spending.

The firm plans to invest around €1.6bn/yr ($1.9bn/yr) in its upstream business in 2021-2025, compared with €2.4bn in 2019 and the €2.6bn/yr announced in its previous 2018-2020 strategic update.

Total spending in upstream over the period will account for €8bn, or around 44pc, of total budgeted investment of €18.3bn, while investments in the low carbon business — including renewables and biofuels — will amount to €5.5bn, or 30pc of the total.

Repsol plans to produce about 650,000 b/d of oil equivalent (boe/d) over the plan, in line with its current target for 2020 output, although it said that it will cut back on exploration. It will also continue to sell upstream assets where it has little geographical presence, after already exiting exploration in Papua New Guinea and Vietnam, and its production business in Ecuador in 2020.

The firm said it plans to become a global low-carbon generation operator, with a capacity of 7.5GW by 2025 and 15GW by 2030. "Repsol's seven large industrial sites in Spain, Portugal, and Peru will continue their transformation to become multi-energy hubs," the firm said.

Repsol also said that it will cut its dividend initially by a third to €0.60/share in 2021 from 2020, partly to finance its new plan.

The strategy is based on a scenario that has Dated Brent at $50/bl and henry hub gas prices at $2.5/mbtu.

Source: argusmedia.com

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