Repsol Boosts Renewables Business As Lower Oil Prices Drag Profits Down

Spanish energy group Repsol reported on Thursday a 14% lower net income for January to September, due to lower crude oil and gas prices than in the year-ago period, while it strengthened its renewable energy portfolio.

Repsol’s net income for the first nine months of 2023 was $2.93 billion (2.785 billion euros), down by 14% year-on-year.

Adjusted income, which specifically measures the performance of the businesses, was fell by 19% to $4 billion (3.816 billion euros), with a lower decline than the drop in oil and natural gas prices compared to the first nine months of 2022.

In the first nine months of 2023, Brent crude oil traded at an average of $82.1 per barrel, 22% lower than in the same period of the previous year. Meanwhile, the average price of Henry Hub gas slumped by 60% to $2.70 per MBtu, Repsol noted.

The Spanish firm boosted its portfolio of renewable energy assets globally, including in the United States.

The company, however, warned that an uncertain regulatory framework could impact its investment decisions in Spain.

“The possible continuation of a tax on energy companies that had been designed to be temporal and extraordinary punishes the companies that, like Repsol, are investing in industrial assets, creating jobs and guaranteeing the country’s energy independence and instead favor importers that neither create jobs nor any relevant economic activity in Spain,” Repsol said.

“The lack of stability of the country's regulatory and fiscal framework may impact Repsol’s future industrial projects Spain.”

Separately, Repsol noted that the recent easing of the U.S. sanctions on Venezuela’s oil “provides future opportunities for the development of greater activity and value creation in the country.”

“Among other aspects, it increases the availability of heavy crude oil for the company's refineries, which have different characteristics to obtain higher yields of this type of oil,” Repsol said.

Joint ventures operated by Eni, Repsol, and Maurel & Prom could increase Venezuela’s crude oil production by an additional 50,000 bpd in the near term, according to IPD Latin America cited by the EIA.

By Charles Kennedy for Oilprice.com

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