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Repsol’s new strategic plan earmarks 5.5 billion euros for low-carbon generation

November 30, 2020

S&P Global Market Intelligence ($):

Repsol SA has unveiled a new strategic plan for the next five years aimed at accelerating its energy transition while boosting shareholder value, according to a Nov. 26 news release. The Spanish integrated oil and gas company said it will decarbonize its asset portfolio and establish a new operating model as it aims to achieve net-zero emissions by 2050.

The strategic plan will have two periods. For the first two years, Repsol plans to focus on ensuring financial strength and extending its efficiency and competitivity programs by prioritizing efficiency, investment cuts and optimization of capital, along with projects to lead the energy transition, according to the company. From 2022 onward, the company will shift its focus to the acceleration of growth.

Repsol intends to invest a total of €18.3 billion between 2021 and 2025, of which €5.5 billion, or 30%, will be spent on low-carbon businesses. As part of the strategic plan, Repsol has also reorganized itself into four business areas: upstream, industrial, customer and low-carbon generation.

Through its low-carbon generation unit, Repsol will target a generation capacity of 7.5 GW by 2025 and 15 GW by 2030. It will develop a portfolio of projects that will grow more than 500 MW annually between 2020 and 2025. The industrial unit is in charge of transitioning its seven industrial sites in Spain, Portugal and Peru to multi-energy hubs, as well as reaching renewable hydrogen production of 400 MW by 2025 with the goal of exceeding 1.2 GW in 2030.

Repsol aims to generate €4.5 billion of free cash flow between 2021 and 2025 and cut emissions by 75% through 2025 through its upstream unit.

Repsol committed to long-term emissions reduction goals as early as 2019. Repsol previously laid out plans to reduce its carbon intensity indicator by 10% by 2025, 20% by 2030, 40% by 2040 and net-zero emissions by 2050, from a 2016 baseline. The new strategic plan looks to cut carbon intensity by 12% in 2025, 25% in 2030, and 50% in 2040.

[Dan Carino Jr.]

More ($): Repsol unveils new strategic plan to accelerate energy transition

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