Spain's Repsol reported Friday that it was swapping assets with Norwegian oil major Statoil in order to reduce its capital spending requirements and free up much-needed cash flow.
Repsol said the deal will help it deliver objectives it outlined in its 2016-to-2020 Strategic Plan, announced in mid-October, which showed that the firm intends to significantly scale back its investment in upstream activities during the next five years.
The transaction announced Friday will see Statoil take a 13-percent stake in the Eagle Ford onshore joint venture in the US, with Repsol retaining a 37-percent interest. Meanwhile, Repsol will acquire a 15-percent stake in Norway's producing Gudrun field. Repsol said the deal reduces its capex needs and will generate a positive free cash flow of EUR 500 million ($550 million) during the 2015-to-2017 period.
Statoil will also acquire a 31-percent equity share in the UK license for Alfa Sentral – a field that spans the UK-Norway maritime border – for $20 million. Statoil will become the largest equity holder in the field in both the UK and Norwegian licenses.
Statoil confirmed the agreement with Repsol in a separate statement, while also taking the opportunity to announce that it will assume operatorship of the BM-C-33 license in Brazil's Campos Basin pending approval from the country's authorities.
John Knight, Statoil's executive vice-president for global strategy, commented in the statement:
"We are delighted to be deepening our relationship with Repsol. In the current challenging market environment, these are innovative, value-enhancing transactions which will help control costs and strengthen Statoil's portfolio for the long term.
"Statoil has ambitious goals for future activity, production and value creation on the Norwegian Continental Shelf and this deal supports our long term ambition. We are bringing a strong partner into Gudrun, an important NCS asset, and our increased interest in the Alfa Sentral development will strengthen our efforts to develop the important Sleipner area towards 2030."
The effective date for the agreements regarding Gudrun and Eagle Ford is January 1, 2015.
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