Repsol Closes LNG Asset Sale to Shell to Bolster Finances

Loading LNG in Trinidad and Tobago, image: Repsol

Jan. 2 (Bloomberg) — Repsol SA completed the sale of liquefied natural gas assets to Royal Dutch Shell Plc as the biggest Spanish oil company strengthens its balance sheet.

The sale of assets in Peru and Trinidad and Tobago, in a deal announced February, and the disposal of a stake in a power plant to BP Plc will cut Repsol’s net debt by $3.3 billion, the company said today in a statement. Its asset sales have reached to more than 5 billion euros ($7 billion), above a 4.5 billion- euro target for sales between 2012 and 2016, Repsol said.

Chairman Antonio Brufau said two months ago that Repsol will use proceeds from asset sales to expand the company overseas after its YPF unit in Argentina was seized in 2012. Repsol may spend as much as $10 billion on acquisitions and is studying unconventional assets in North America, he said.

The company, a producer in Angola, Libya and Bolivia, is seeking to rebalance in favor of developed countries with legal stability, Brufau said in a November interview.

Repsol, down 23 percent since the beginning of 2012, fell 0.6 percent to 18.21 euros as of 10:15 a.m. in Madrid.

The company is considering disposing of its holding in Gas Natural, Spain’s largest gas utility, as the sale of Repsol’s LNG assets to Shell removed the strategic reason for the stake. Repsol won’t sell to return cash to shareholders, Brufau said.

Repsol is talking to Argentina over compensation for YPF. The two sides reached a preliminary deal in November. Argentina offered $5 billion in 10-year bonds, a person briefed on the proposal said in November, declining to be identified. Repsol initially demanded $10.5 billion for its 51 percent stake.

– Brian Swint, Copyright 2014 Bloomberg.

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