Repsol's shares climbed 3.47% yesterday on the stock market after hearing the news that the oil company chaired by Antonio Brufau is in initial talks with the EIG Global Energy Partners fund for the sale of 25% of its oil extraction business and gas.
The exclusive published mid-morning yesterday by the Reuters agency assured that the US fund has taken the initiative of the operation through an "unsolicited" offer (by Repsol) and would have offered an initial valuation of the upstream business (extraction of oil and gas) between 14,000 and 18,000 million euros, including debt. The market extrapolated that assessment to the rest of the company's businesses and the shares ended the session at 15.95 euros, levels not reached since the summer of 2008.
The news was confirmed by Repsol in a brief statement to the National Securities Market Commission (CNMV) in which it is "analyzing various opportunities and proposals related to said business, without any decision being made in this regard."
At the same time, it identifies this exploration and production business “as strategic, which includes its long-term maintenance and consolidation. In the context of the dynamic and permanent management of the business portfolio”.
Both Reuters and financial sources explain that this type of negotiation is common and that the talks could last for months, with no guarantee of reaching an agreement. In these negotiations, the exact perimeter that Repsol would be willing to sell, the price, the decision-making capacity of the US fund in the event of becoming a shareholder must first be defined, despite the fact that Repsol, as indicated in its statement, would in any case maintain control of the company.
The outbreak of the war in Ukraine has pushed up oil and gas prices to record highs and has allowed the company chaired by Brufau to raise its profits by 114% in the first quarter of 2022 and accumulate a stock market revaluation close to 50% since beginning of the year. The attractiveness of oil and gas extraction businesses in a context of international boycott of one of the key players in this business, Russia, is undeniable. The Stoxx Europe 600 Oil hydrocarbons sector index
