Latin American Oil, Gas Fields Big Part of Repsol Strategy Through 2014

MADRID – Spanish oil giant Repsol-YPF announced on Thursday that its board of directors approved the company’s strategic plan through 2014, noting that it is based on a “larger and more solid portfolio of growth projects” that include promising oil fields in Brazil and gas deposits in Peru, Bolivia and Venezuela.


The company will earmark a sizable portion of the 28.5 billion euros ($37.75 billion) it plans to invest over the next four years for the development of those projects.


Repsol-YPF said its Horizon 2014 plan stipulates that 33 percent of its overall investment will be devoted to its Upstream (Exploration and Production) area – the company’s growth driver – and liquefied natural gas business in Brazil, Venezuela, the Gulf of Mexico, Peru and Bolivia.


“Repsol’s investment strategy for Horizon 2014 is based on a larger and more solid portfolio of growth projects in Upstream that include the development of the Guara and Piracuca oil fields in Brazil, the Kinteroni gas field in Peru, the Margarita-Huacaya gas fields in Bolivia and the Cardon IV gas field in Venezuela,” the company said in a statement.



“To these projects, other, more recent, discoveries which are undergoing production tests will be added after 2014: Panoramix, Iguazu and Abare West in Brazil, Buckskin in the Gulf of Mexico, blocks NC-200 and NC-186Y1 in Libya, Tanger-Larache in Morocco and Venus in Sierra Leone.”


During the presentation of its Horizon 2014 plan and of the company’s results in the first quarter of 2010, an press conference attended by CEO Antonio Brufau, the company announced that it expects to generate 4.5 billion euros ($5.96 billion) in after-tax earnings from the sale of assets over the next five years.

In Brazil, the company plans to invest $4-5 billion through 2014 and as much as $9 billion between 2014 and 2019 in crude production.

As previously announced in November, Repsol is looking to attract minority shareholders for its technically complex, ultra-deep sea projects in Brazil, Brufau said Thursday, adding that the company has hired several investment banks to analyze the best way to bring those partners on board.

Repsol also said it plans to invest 6.7 billion euros ($8.87 billion) in the Downstream (Marketing and Refining) area, 8.4 billion euros ($11.13 billion) in Argentine subsidiary YPF and 3.4 billion euros ($4.5 billion) in Gas Natural Fenosa, the gas group in which Repsol holds roughly a 30 percent stake.

Brufau also said the company is looking for buyers of minority stakes in YPF and could sell shares either directly to one or more large investors or through a public offering.

Repsol has based its Horizon 2014 plan on the assumption of a price-per-barrel of Brent oil – Europe’s benchmark crude – of $70 in 2010 and $90 in 2014.
Repsol-YPF posted 688 million euros ($911.2 million) in net profit in the first quarter, up 30 percent from the same period of 2009, mainly due to a recovery in crude prices (up 71.1 percent in the case of Brent) and a 10.4 percent increase in production.