Repsol selling $7.1B of assets to cope with weak oil prices

Repsol plan calls for 38 per cent spending cut between 2016-2020

Repsol cuts spending, sells non-strategic assets to cope with low oil prices.  Repsol photo.

Repsol, the international energy company based in Spain announced it will be selling 6.2 billion euros ($7.1B) in non-strategic assets and cutting spending over the next five years as part of a plan to increase efficiency and combat low oil prices.

Low oil prices have forced Repsol and many energy companies to make significant adjustments in their long term plans.

On Thursday, the company announced that its 2016-2020 strategic plan includes a 38 per cent cut in spending that is not expected to alter the company’s profile.

Dividend payments are expected to remain stable, even if crude prices remain at $50 per barrel.

Last December, Repsol purchased Calgary-based Talisman Energy for $13 billion.  In a press release issued Thursday, the company said that with the integration of Talisman, Repsol will extract value from its growth to increase efficiency and resilience as well as take advantage of opportunities that arise in the current energy environment.

On Wednesday, Repsol reported its net profit for the current year will fall to between 1.25 billion euros and 1.5 billion euros from 1.61 billion euros in 2014.  The drop is blamed on lower oil prices and refining margins.