Feb 7 (Reuters) – Spanish oil main Repsol SA (REP.MC) is contemplating placing a few of its Canadian belongings on the market later this 12 months because it seems to be to reap the advantages of upper oil and gasoline costs, 4 sources informed Reuters on Monday.
Repsol is looking for consumers for its holdings within the Duvernay basin, in western Canada, that are nonetheless in early improvement levels, in accordance with its web site. The corporate’s 170,000 acres (688 sq. kilometers) within the Duvernay might fetch about C$750 million ($589.9 million), in accordance with an trade supply.
The transfer by Repsol follows a number of world oil majors which have rushed to promote belongings within the No. 4 oil-producing nation over the previous 4 years over considerations starting from excessive manufacturing prices and emissions to shortage of capital for fossil gas initiatives.
Imperial Oil Ltd (IMO.TO), whose majority proprietor is U.S. oil producer Exxon Mobil Corp (XOM.N), marketed its Canadian three way partnership final month whereas Japan’s JAPEX (1662.T) offered its stake within the Hangingstone oil sands mission final 12 months and Abu Dhabi’s TAQA employed advisors to promote all of its Canadian oil and gasoline producing belongings
Repsol additionally owns belongings in Alberta’s Higher Edson and Chauvin basins, together with gas- and power-related infrastructure. Repsol has not made a remaining resolution on any of the belongings, the sources cautioned, including that among the many choices it might contemplate are partial sell-downs or joint ventures.
Repsol, whose complete annual Canadian manufacturing was 57,800 barrels of oil equal per day in 2019, might nonetheless select to retain the belongings as is, they mentioned.
The sources requested anonymity because the discussions are confidential. A Repsol consultant mentioned the corporate doesn’t touch upon market hypothesis.
Repsol bolstered its Canadian enterprise with the $8 billion buy of Talisman Vitality in 2015. 4 years later, with oil costs languishing, Repsol reduce 30% of its Canadian workers as a part of a world restructuring.
After the coronavirus pandemic pushed U.S. crude costs into unfavourable territory for the primary time ever in 2020, and traders utilized higher strain for fossil fuels corporations to transition to cleaner vitality, Repsol unveiled a five-year plan to chop upstream spending and increase low-carbon investments.
North American crude hit $90 per barrel final week, notching seven-year highs, spurring asset sellers to look to money in. The sturdy restoration has additionally inspired Repsol to make pure gasoline purchases in areas thought of extra worthwhile.
The Spanish firm in January purchased U.S. gasoline producer Rockdale Marcellus, and has been eyeing further purchases within the U.S. Eagle Ford basin, two sources conversant in transactions within the nation informed Reuters.
($1 = 1.2714 Canadian {dollars})
Reporting by Shariq Khan in Bengaluru and Rod Nickel in Winnipeg
Modifying by Denny Thomas and Marguerita Choy
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