Repsol Boosts Funds for Upstream with LNG Asset Sale
by Jon Mainwaring
|Tuesday, February 26, 2013
Spain's Repsol announced late Tuesday that it is selling several of its LNG assets for $6.7 billion to Royal Dutch Shell. The funds will be used by the firm to boost organic growth in its upstream division as detailed in its 2012-2016 strategic plan published last May.
The agreement, which will generate a $3.5 billion pre-tax capital gain for Repsol, will see assets in Trinidad & Tobago (Atlantic LNG), Peru LNG and Bahia de Bizkala Electricidad pass over to Shell. Repsol and Shell have also agreed a 10-year LNG supply contract to the Canaport regasification terminal in Saint John, Canada, which will remain with Repsol.
Repsol said that its exploration and production unit is now the company's main growth engine, centered on 10 key growth projects that include some of Repsol's most significant exploration successes of recent years.
The firm pointed out that it will continue to maintain significant exploration and production activity in the countries where it has sold LNG assets. In Peru it recently made an important discovery at Sagari, in block 57, with preliminary resources estimates of up to two trillion cubic feet of gas. In Trinidad and Tobago production is ongoing and Repsol is drilling new wells and exploring options to obtain new licenses to added to the seven blocks where it is already active.
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