Repsol Profit Highest for Years, on Upstream Gains

Repsol posted full year 2017 net income of €2.12bn ($2.6bn), its highest in six years, and up 22% year on year, as its upstream division reported a massive increase in profits.

The Spanish integrated major reported February 28 adjusted net income for 2017, measuring business performance, up by 25% to €2.4bn – also the highest in six years.

While downstream profits were stable at €1.88bn, Repsol's upstream division saw its profit increase twelve-fold to €632mn, with a 0.7% increase in production to 695,000 barrels of oil equivalent/day. This exceeded Repsol’s target for 2017 of 680,000 boe/d, thanks to gas field start-ups in Trinidad (Juniper) in August 2017, Peru (Sagari where one quarter of the country’s gas is produced) in November; and Algeria (Reggane Nord) in December. Repsol said production at Reggane Nord is expected to reach its maximum capacity (at 100% equity) of 8mn m³/d (2.92bn m³/yr) by the end of March. Future output growth will come from fresh discoveries including one in Trinidad that was Repsol’s largest gas discovery for five years. 

Pre-tax earnings (Ebitda) were 29% higher year on year at €6.72bn, which Repsol said reflected its “capacity to adapt to lower crude oil and gas prices” but also its integrated business model.

Repsol also noted its February 22 agreement to sell its remaining 20.072% stake in Spanish utility Gas Natural  to a CVC-controlled company, Rioja Bidco Shareholdings, for some €3.82bn – which should give Repsol a capital gain of about €400mn. Repsol has been a core shareholder in the company for nearly three decades.