Making lemonade

20 July 2012 By Kevin Allison

The Spanish oil major is shedding non-essential assets and striking clever financing deals in the wake of the YPF fiasco. Selling cash-cow liquefied natural gas assets could raise up to 3 bln euros to plow into upstream growth. It’s not a bad response to tricky circumstances.

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Spanish oil major Repsol said on July 19 that it was “analyzing alternatives” for its liquefied natural gas assets as part of an ongoing divestment programme. It did not specify which parts of its LNG business it was considering selling and said the review of the business was at a preliminary stage.
Repsol also said it had struck a 12-month 1 billion euro financing deal backed by 10.5 percent of the shares of Gas Natural Fenosa, the Spanish gas utility. Repsol owns 31 percent of Gas Natural.
The Madrid-based company earlier on July 19 announced it had sold its Chilean gas business for $540 million. The sale, which will reduce the group’s debt by $317 million, was the first disposal since the group outlined its new strategic plan, which calls for 4.5 billion euros of disposals and 19.1 billion euros of new investment through 2016.
Repsol’s LNG assets include shares in gas facilities in Trinidad and Tobago, Peru and Canada, as well as marketing and off-take agreements.

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