MOSCOW (MRC) -- Repsol is considering selling assets in countries including Venezuela as the Spanish oil company seeks to reduce debt after its USD13 billion purchase of Talisman Energy last year, said Hydrocarbonprocessing.
As part of its plan to reduce peripheral assets, Madrid-based Repsol may also look at divestments in Alaska, Bolivia and the Gulf of Mexico, two of the people said, asking not to be identified as the matter is private. No final decision has been made and the company is still deciding which units to sell, or whether to keep the assets, they said.
After acquiring Talisman in the biggest foreign acquisition by a Spanish company since 2006, Repsol CEO Josu Jon Imaz is focusing on integrating the two companies while increasing cash flow and reducing costs.
Repsol aims to sell about USD1 billion in assets over 12 months, Imaz said in December after the company announced its offer to acquire Talisman Energy. Repsol has subsequently said it is looking to sell peripheral assets.
A spokesman for Repsol declined to comment on asset sales.
Production from Talisman’s assets is expected to almost double Repsol’s output to around 700,000 bpd. To avoid growing too big as new projects come on-stream and dilute the contribution of refining, the company has said it plans to divest certain assets over time.
Repsol also needs to maintain its credit rating, which stands at BBB- at Standard & Poor’s, the lowest investment grade. The Talisman deal included almost USD5 billion of debt owed by the Canadian producer. With crude trading near USD50/bbl, the company is reluctant to sell production assets and will start with downstream assets like pipelines, CEO Imaz has said.
As MRC informed earlier, Repsol recently lifted force majeure on delivery of high-density polyethylene (HDPE) at Sines (Sines), Portugal. The company resumed production of HDPE in normal mode on July 17.
Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC