Spain’s Repsol is in early discussions to sell a stake in its oil and gas exploration and production business to private equity firm EIG Global Energy Partners, reported Reuters, citing three sources with knowledge of the matter.

According to sources, EIG is looking to purchase a stake of up to 25% in Repsol’s upstream business.

A potential deal would provide the Spanish firm with cash to fund its plans to increase its clean energy capacity, including solar and wind projects.

According to analysts, Repsol’s upstream business could be valued at $15bn to $19bn (€14bn to €18bn), including debt.

The discussion, which is expected to take months to conclude, follows an unsolicited offer made by EIG. There is no certainty that a deal would be reached, the sources added.

Repsol has set a target to more than double its installed, low-carbon power generation capacity to 7.5 gigawatts by 2025.

A Redburn analyst was cited by the news agency as saying to clients in a note: “Selling a stake in the upstream business would allow Repsol to crystallise value at a high point in the cycle.

“For EIG to actually realise that value, we suspect there would have to be some form of commitment to run it for cash and distribute free cash flow to the shareholders. This enforced capital discipline would also be positive for Repsol shareholders, in our view.”

In a bid to streamline its operations, the Spanish energy company has already divested stakes in exploration businesses in several countries.

 It also offloaded its Russian assets to Gazprom Neft earlier this year.

In a statement to Spain’s regulator, Repsol said it was exploring opportunities and assessing offers for its exploration and production unit, but the firm has not made any decision.

Earlier this year, Hibiscus Petroleum purchased Repsol’s oil and gas assets in Malaysia and Vietnam, in a deal worth approximately $212.5m.