Spanish energy group Repsol is taking a "softer" approach to its search for a partner for its newly created renewables unit as oil and gas prices are helping the company generate cash, its chief executive said on Thursday.
Along with major European energy companies like BP and TotalEnergies, Repsol has been investing in low-carbon technology to meet regulatory and shareholder demands to reduce their contribution to planet-warming carbon emissions.
Repsol has conducted months of talks to find a buyer for a stake of up to 25% in the business which is building wind, solar and hydro plants in Spain, the United States, and Chile. CEO Josu Jon Imaz said this process was now at "an advanced stage".
"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 on a conference call.
He added: "This process is being held more quietly, more softly if you like, seeing as 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 condition."
Imaz first suggested spinning off the renewables business to try to maximize returns in October 2020, when oil producers around the world were slashing investments as crude prices plummeted.
Benchmark Brent crude oil LCoC1 was trading around $38 per barrel at the time, compared with around $104 on Thursday.
Commodities prices soared after Russia invaded Ukraine in February, sending shockwaves through markets already reeling from last year's collision between tight supplies and high demand in economies reopening after COVID-19 lockdowns.
Potential buyers have been put off by the terms on offer, fearing they would have little say in key decisions, sources familiar with the matter have told Reuters. Read full storyRead full story
Imaz said: "The kind of partner we are looking for is a non-operating partner, we want to operate, we want to lead this business."
(Reuters - Reporting by Isla Binnie / Editing by Nathan Allen and Mark Potter)