Spain’s Repsol is selling out of a clutch of oil and gas blocks in West Siberia after agreeing to offload its stake to its current Russian partner in the joint venture, it has confirmed in an emailed statement.
The company is selling its 49% stake in AR Oil & Gas to the majority shareholder, privately held Russian producer Neftegazholding, Spanish news agency Europa Press reported, citing unidentified market sources.
Neftegazholding holds a 51% interest in AR Oil & Gas, which owns exploration and development licences for about 20 small oil and gas blocks in the Tatarstan and Samara regions via its subsidiaries.
Neftegazholding, which is a well-connected oil producer in Russia, has been expanding its operations recently by taking control over legacy producing assets, previously operated by the country's largest oil producer, Rosneft.
In November, Repsol had set out a new mid-term strategic plan to prepare its business for the energy transition.
The plan calls for the sale of some of its upstream assets and slashing almost in half the number of countries in which it operates to 14.
"This transaction is aligned with the new strategic plan presented last year to a more focused portfolio", the company said in the statement.
In March, Repsol shut down operations of its subsidiary Repsol E&P Eurasia in Moscow, according to a company disclosure notice obtained by Russian agency Interfax.
Last year, the Spanish company resolved not to proceed with its plan to take a 25% stake in a joint venture, established by Russian state-controlled oil producer Gazprom Neft and Anglo-Dutch supermajor Shell, to explore two large oil and gas blocks on Russia's Gydan Peninsula.
However, Repsol has retained its stake in two exploration joint ventures with Gazprom Neft, known as Yevrotek-Yugra and ASB Geo.
The ventures and their subsidiaries have accumulated licences for several Karabashsky blocks in the Kondinsky district in the southwestern part of the Khanty-Mansiysk region, a major Russian oil province.
However, these blocks are a pure exploration play with high risk as they are located in unexplored area away from major oilfields in the central, eastern and northeastern parts of the region.
According to Gazprom Neft, both ventures with Repsol will continue to gather seismic data on blocks under their control after drilling several exploration wells between 2013 and 2018 that resulted in the Ouryinskoye discovery on the Karabashsky 2 tract.
Exploration drilling is also set to continue on the Ouryinskoye field to improve its reserve estimates.
Repsol said in its latest financial report that it spent about €1.9 million ($2.3 million) on exploration in Russia during the first quarter of this year, as against the €18.3 million it invested into its projects in the country for the whole of last year.