Spanish energy group Repsol has signed a deal to divest a 25% stake in its newly-formed global exploration and production (E&P) company, Repsol Upstream, to US private equity firm EIG for $4.8bn, including debt.
The stake in Repsol Upstream, which comprises the entire global upstream oil and gas business of Repsol, will be purchased by EIG’s newly formed, wholly owned subsidiary Breakwater Energy.
The transaction is expected to lead to the listing of a minority stake in Repsol’s oil and gas exploration division on the US stock market after 2026, subject to favourable market conditions.
Proceeds from the sale will be used by Repsol to invest in the energy transition, specifically to increase renewable power generation, renewable fuels, and circular products segments.
Upon completion of the transaction, Repsol will own a majority stake of 75% in its oil and gas exploration division.
The transaction implies a total enterprise value of approximately $19bn for Repsol Upstream, which is expected to produce nearly 590,000 barrels of oil equivalent per day.
As per the estimates, Repsol Upstream has proved and probable reserves of 2.3 billion barrels of oil equivalent, with approximately 70% being gas.
Repsol CEO Josu Jon Imaz said: “Our ambition is to lead the energy transition. This pioneering agreement allows us to maintain the strategic direction of the upstream unit and, at the same time, to boost the transformation of the company and its multi-energy profile to achieve zero-net emissions by 2050.”
The transaction is scheduled to close within the next six months, upon completion of the corporate structure of the upstream business and receipt of regulatory approvals.
Repsol said in a statement: “The unit will continue to focus growth on key regional hubs and with a diversified portfolio of exploration and production assets in Organisation for Economic Co-operation and Development (OECD) countries.”
In a separate announcement, Repsol agreed to divest approximately 95,000 net acres of oil and gas producing land in Alberta, Canada, to Teine Energy, reported Reuters, citing three sources familiar with the plan.
The sale could earn up to C$400m ($304.65m) for Repsol, one of the sources said.