The group strengthens its presence in the country with the operation, which will not have a significant impact on its accounts
MADRID, 28 Abr. (EUROPA PRESS) –
Repsol has reached an agreement with Sinopec that puts an end to the legal battle it had with China, which will take over the latter’s 49% stake in the joint venture -Repsol Sinopec Resources UK (RSRUK)- that they have in the United Kingdom for an amount of about 1,903 million euros, which will also allow the group chaired by Antonio Brufau to strengthen its presence in this country.
As reported by the company to the National Securities Market Commission (CNMV), once the acquisition is completed, Repsol will become the owner of 100% of RSRUK. Specifically, the total amount of the agreement amounts to 2,100 million dollars (about 1,903 million euros).
However, Repsol pointed out that the transaction will not have a significant impact on its results, since it recorded a provision in its accounts for arbitration -close to 800 million euros- and, furthermore, once the treasury available in RSRUK has been consolidated for the 49% stake, the net cash flow impact for the company will be 1,100 billion dollars (about 997 million euros).
Thus, both companies will immediately suspend and, upon completion of the transaction, resolve the lengthy arbitration proceedings in relation to Sinopec’s acquisition of its stake in RSRUK from the Canadian group Talisman, which was later acquired by Repsol.
The agreement is strategic for Repsol, since it allows it to close the legal fronts that it had open with Sinopec, once the operation is closed, scheduled for before the end of 2023.
The matter dated back to 2015, when Sinopec filed a lawsuit related to the purchase of 49% of the shares of Sinopec Resources UK Limited in 2012 by Addax and China, and the investment commitments they acquired together with Talisman at the time. , a company that was later bought by Repsol.
Since then, both companies have kept the dispute open, with claims and counterclaims, with the request by Sinopec for compensation of 5,500 million dollars (about 5,100 million euros) for the damages of the investment committed in the joint venture in the United Kingdom. Kingdom that it had then with the Canadian Talisman.
In this way, Repsol settles this confrontation with Sinopec, a traditional partner for the Spanish energy company, with which it maintains a strong alliance in Brazil, and also closes one of the large judicial fronts that it had open.
This Thursday, on the occasion of a conference with analysts for the results of the first quarter of the year, the CEO of Repsol, Josu Jon Imaz, already reached out to “an open dialogue” with Sinopec, with the aim “of achieving what could be a fair settlement to this conflict.”
The executive recalled that there had been three partial awards in this arbitration, one favorable to Repsol, another unfavorable and a third of five parts, “many of them favorable”.
In this sense, he recalled that Repsol is a partner of Sinopec in the United Kingdom and Brazil, for which reason he insisted that the objective was “to find a reasonable solution to this legal dispute together.”
Repsol Sinopec Resources UK, based in Aberdeen, Scotland, has 11 offshore crude production facilities connected to 48 fields in the North Sea, 38 of which are operated. In addition, it controls two ground terminals. Its current production is approximately 40,000 barrels of oil equivalent per day, of which 40% is gas.
With the acquisition of these assets, the company led by Josu Jon Imaz advances in its ‘upstream’ (exploration and production) strategy, focused on consolidating and growing its production portfolio in OECD countries.
In addition, by having full control of the company, it will accelerate the creation of value in these assets, by allowing greater efficiency in decision-making, greater synergies with other areas of Repsol, and the development of both production and decarbonization projects. and energy transition, a key axis for the future of the company and the ‘upstream’ unit.
Likewise, RSRUK has projects for the development of new production in Claymore, Piper, Shaw and Montrose. This oil and gas production makes it possible to supply the European Union, whose hydrocarbon deficit has been aggravated by the war in Ukraine.
This company is also developing one of the first green hydrogen projects in the United Kingdom at the Flotta terminal (Scotland). RSRUK’s facilities and infrastructure present attractive conditions for the development of C02 storage projects in line with the drive that the UK government intends to give this activity to make the country a technology leader in this space.
In addition, the company is studying the use of its maritime facilities to develop electrification projects for its own and third-party production platforms, which will contribute to reducing the carbon footprint of hydrocarbon production activities.
