Repsol has taken aim at higher emissions-reduction targets as the Spanish major laid out a new strategic plan to the middle of the decade that will see it sell some upstream assets and re-focus its exploration efforts.

The Madrid-based giant is organising the company into four new business units and is looking to significantly ramp up its renewable energy output capacity although at the same time boosting free cash flow from its upstream operations five-fold.


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The 2021-2025 plan calls for total investments of €18.3 billion ($21.85 billion) in the period, with 30% — €5.5 billion — of this spent in the low-carbon business.

Four new business units

Low-carbon generation will be one of the four new business units, with the others being upstream, industrial and customer.

For upstream, the focus will be on key geographical regions, Repsol said on Thursday, although it did not identify those regions.

“The global presence will be reduced to 14 countries, with a more efficient and focused exploration programme,” the company added of its upstream unit, although again not identifying where any asset sales will take place.

The focus in upstream will be on “developing short-cycle projects to be managed with flexibility and with a limited capital intensity that will be among the lowest in the industry”, it said.

Oil & gas production strong

Production in the five-year period will average 650,000 barrels of oil equivalent per day, which is up from 616,000 boepd in the third quarter but below the 730,000 boepd with which it exited 2019.

Free cash flow of €4.5 billion is being targeted for the period between next year and 2025, which is five times more than between2016 and this year.

The upstream wing is also aiming to reduce emissions by 75% through 2025.

Overall, Repsol has boosted its emissions-reduction targets as it now aims to reduce emissions intensity by 12% in 2025 (as against the previous objective of 10%), 25% in 2030 (20%) and 50% (40%) in 2040, en route to being net-zero in 2050.

Digitialisation and harnessing new technologies will play a key role in hitting those goals.

Expanding green energy asset base

For the low-carbon business, Repsol is looking to increase its asset base with an objective of 7.5 gigawatts of capacity by 2025 and 15 GW by 2030.

“The company is planning to continue the organic growth of this business through the development of a portfolio of projects in operation that will grow at an annual rate of more than 500MW between 2020 and 2025,” it said.

Earnings before interest, tax, depreciation and amortisation from this division are set to jump eight-fold from the 2019 figure to €331 million by 2025, with investments to reach €1.4 billion a year by that mark — also an eight-fold increase on last year.

Repsol said its new strategy will be “highly flexible in relation to the macroeconomic environment” and will be self-funding at an average Brent oil price of $50 per barrel and $2.5 per thousand British thermal units of gas at Henry Hub.

The strategy will be rolled out in two phases, with the first two years ensuring financial strength, and the focus shifting to accelerating growth from 2022.

'Multi-energy offering'

Chief executive Josu Jon Imaz said: “With this new strategic plan, which leverages our strengths, we are taking a significant step towards becoming a net-zero emissions company, outlining a profitable and realistic roadmap that will allow us to grow, maximize value for our shareholders, and assure the future.

“Our strategy is based on a multi-energy offering that combines all the technologies for decarbonisation of energy. We will be more efficient and increase our renewable energy objectives as well as our manufacture of products with a low, neutral, or even a negative carbon footprint.

“We will promote circular economy initiatives, develop new energy solutions for our customers, and boost cutting-edge projects to reduce the industry’s carbon footprint.”

The company added: “By 2030, Repsol will be a company that is renewed, more sustainable, and more focused.”