Repsol Posts Upstream Earnings Loss, Reaffirms Plans to cut Spend

Following a $678 million loss in the nine month period from Jan to Sept this year for Repsol’s upstream division (2014: $627 million profit), the group reaffirmed its plans to significantly scale back upstream investment over the next five years.

The loss was influenced by the interruption of activity in Libya and the write-off of wells drilled by the company, according to Repsol, which stated that without the effect of exploratory spending, operating income from its upstream business would have been positive. In its 2016-2020 Strategic Plan, released in Oct, the Spanish oil giant outlined that upstream capital expenditure will be cut by around 40 percent, compared to 2014 levels, over the next five years. Repsol will also reduce its exploration activity to just three core regions - North America, Latin America and South East Asia - and aim to sell off more than $7 billion worth of non-strategic upstream and downstream assets by 2020.

The energy firm’s average output in the third quarter, the first complete period since Repsol’s Talisman integration, was 653,400 barrels of oil equivalent per day, which is an 80 percent increase compared to the same period in 2014. During October this figure increased to 685,000 barrels of oil equivalent per day. In 2015 Repsol has added new production as a result of the successful start-up and ramp-up of projects in Brazil, the United States, Peru, Venezuela, and Bolivia, as well as the significant output increase from the integration of Talisman, mainly from North America and Asia.