In Repsol's 2016-2020 Strategic Plan, unveiled today, the company vowed to cut spending by 38% and divest US$7.1 billion (€6.2 billion) in non-strategic assets. The company said it expected to make half of those divestments in the next two years.
The news comes after it was reported earlier this month that the Spanish energy giant would reduce its workforce by 6% by 2020, eliminating some 1500 jobs.
In the Upstream sector, Repsol said it plans to focus its exploration and production unit on three regions: North America, Latin America, and Southeast Asia.
Repsol has had much recent success in Latin America. In July, Repsol, through its 50-50 Cardón IV S.A. joint venture with Eni, began production from phase one of the Perla gas field, 50km offshore Venezuela. Perla currently holds 17 Tcf of gas in place, which corresponds to 3.1 billion boe, with additional potential.
Repsol also holds 25% through its subsidiary Repsol Sinopec Brasil in the Petrobras-operated deepwater Lapa field, discovered in 2007, in the BM-S-9 concession in the Santos basin. The field is located in 2140m of water approximately 273 km off the south coast of Rio de Janeiro. It is expected to go into production by 4Q 2016, according to analyst firm Simmons & Co.
In Southeast Asia, Repsol holds interests in WA-480-P off Western Australia, and gained non-operated interests in the Laminaria (33%) and Corallina (40%) fields offshore Australia through its $8.3 billion acquisition of Talisman Energy, which closed back in May. Both companies also hold interests in Indonesia, Malaysia, and Vietnam.
Repsol is only the latest company to announced a new round of spending cuts and divestments during the continued downturn.
Earlier this month, Petrobras announced even steeper cuts to its 2015-2019 investment plan. The Brazilian national opted to cut $3 billion in spending in 2015, and $8 billion in 2016, in a budget where it had already planed to cut back on investments by 41% over the previous year's estimates.
Last month, French major Total said it planned to reduce capital spending to $23-24 billion in 2015, from the peak of $28 billion in 2013. The company will then further reduce spending down to $20-21 billion in 2016, before returning to a "sustainable level" of $17-18 billion from 2017 onward.
Image: Perla topsides/Repsol
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