Repsol and its Italian peer Eni are determined not to let rising oil and gas prices distract them from plans to gain from their renewables divisions as both companies enjoyed sharp improvements in their first-quarter earnings.

Higher oil and gas prices have given the Spanish major some breathing space in its hunt for partners for its renewables unit, but the process is in an “advanced stage”, according to chief executive Josu Jon Imaz.

Repsol has engaged in long-running talks to find a buyer for up to 25% of a business unit focused on wind, solar, and hydro power plants in Spain, the US and Chile.

“We are looking for a new partner that should add value, and it has to be fully aligned with our growth strategy… while we maintain the control of the vehicle,” Imaz told analysts during an earnings call on Thursday.

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Imaz said this process was now at “an advanced stage”, but added: “This process is being held more quietly, more softly if you like, since we are generating more cash than expected thanks to the current macro scenario.

“We have the cash flow to grow, we have the optionality to take a decision and we are going to take this decision only if we find the partner fulfilling all these conditions.”

Repsol was the first major oil company to declare a net-zero emissions target and has been investing heavily in low-carbon technology and projects.

Imaz first floated the idea of spinning off the company’s renewables business in October 2020.

At that time, the coronavirus pandemic was depressing crude prices and low-carbon investments were looking like an alternative revenue stream to attract investors.

Repsol aimed to raise up to €4 billion ($4.2 billion) by selling up to 49% of its renewable unit, according to Reuters.

Surging oil prices and flat margins on some renewables projects have shifted the dial since then, but a stake sale is still moving ahead, Imaz signalled.

“The kind of partner we are looking for is a non-operating partner; we want to operate, we want to lead this business,” Imaz said.

Repsol reported a net profit of €1.39 billion in the first quarter of 2022, up 115% from €648 million in the corresponding quarter of 2021.

Eni anticipates IPO for Plenitude

Eni expects to launch an initial public offering later this year for Plenitude, its retail company integrating renewables with gas and power.

The move comes after Eni launched the largest European oil and gas IPO in 15 years.

Eni listed its Norwegian upstream business, Vaar Energi,on the Oslo Stock Exchange in February, and its share price has since increased 45%, the company said. The sale boosted profits by €400 million.

Eni also listed its energy transition special-purpose acquisition company, New Energy One Acquisition, on the London Stock Exchange in March.

The Italian company has officially filed registration documents with the Italian Market Authority for the Plenitude IPO after the business quadrupled its renewables capacity in the past year and now serves more than 10 million customers. The retail business earned an adjusted net profit of €119 million for the quarter.

Overall, Eni’s adjusted net profit was €3.27 billion for the first quarter, increasing from just €270 million in the first quarter of 2021.

Just before the earnings were announced, the company partnered with Iveco to decarbonise transportation through the use of biofuels, biomethane and hydrogen in vehicles. It is part of Eni’s plan to set up a sustainable mobility entity.

Eni is addressing the European energy crisis with an increase in gas exports from Africa. The company is importing more natural gas through pipelines from Algeria and Libya and plans to accelerate liquefied natural gas projects in Egypt, Angola and Congo-Brazzaville.

“We rapidly reacted to the ongoing challenges of the energy market by leveraging our global upstream and partnerships with producing countries to find alternative and additional supply opportunities for Europe,” chief executive Claudio Descalzi said.