Spanish oil company Repsol is reported to be considering the sale of its remaining 12% stake in YPF after reaching a compensation deal with the Argentine state-owned player over an earlier asset seizure.
"We no longer have any legal constraints to keep the remaining 12% stake in YPF. Therefore we'll look into all available options," Reuters quoted Repsol chairman Antonio Brufau as saying on a conference call on Wednesday.
He said proceeds from the YPF settlement, the sale of liquefied natural gas assets and the possible sale of its YPF stake would allow the company "to continue our sustainable path of growth in the upstream business”.
The $5 billion settlement was reached this week after a bitter two-year dispute over the expropriation by the Buenos Aires government of Repsol’s former 51% interest in YPF in 2012.
player is also targeting further acquisitions to bolsters it exploration and
production business after losing a big chunk of its operations in Argentina.
settlement cash, plus proceeds from the possible stake sale, would provide between
$6 billion and $6.5 billion for the company to buy E&P assets in OECD
countries, particularly the US or Canada, Brufau said.
find an opportunity in terms of companies or assets with a remuneration above
our cost of capital, we'll study that opportunity," he said.
we shouldn't get crazy," he added.
Madrid-based company is in the middle of a four-year plan to gain size to
better compete for international exploration projects and to compensate for the
loss of YPF, which had accounted for over half its output.
strategy contrasts with that of other European oil companies such as Anglo-Dutch
Shell and France's Total , which are sacrificing investments to hand cash back
Brufau also said he had invited Repsol’s third largest shareholder, Mexican state-owned Pemex, to tighten the two companies' business alliance.
Repsol and Pemex signed an industrial agreement two years ago but a tense relationship between the pair has so far prevented the deal from bearing fruit.
"Yesterday we tried to improve the relationship with Pemex at the board meeting ... and I offered the representative of Pemex to sit with the company to start analysing all opportunities to co-operate," Brufau said.
Meanwhile, Repsol said in a presentation that three quarters of a planned €3.6 billion ($4.9 billion) in investments this year would be directed to its upstream business, which would not have to rely on cash from its downstream division to finance itself within one year.