Repsol unveils new strategic plan to accelerate energy transition
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.
To maintain shareholder distribution, Repsol set its cash dividend at 60 cents per share, which will eventually increase to 75 cents per share. Including buybacks, the dividend can also exceed €1 per share in 2025, Repsol said.
Nov. 26, 2020