WASHINGTON–(BUSINESS WIRE)–EIG, a number one institutional investor within the world vitality and infrastructure sectors, right now introduced that it has entered right into a definitive settlement with Repsol S.A. (“Repsol”) to accumulate a 25% stake in Repsol Upstream, a newly-formed world exploration & manufacturing (“E&P”) firm comprising Repsol’s total world upstream oil and fuel enterprise. The strategic partnership delivers upfront capital to Repsol to extend its funding within the vitality transition, particularly to help the expansion of Repsol’s renewable energy era, renewable fuels, and round merchandise segments.
Beneath the phrases of the settlement, a newly shaped, wholly owned subsidiary of EIG, Breakwater Power, will purchase the 25% curiosity in Repsol Upstream for whole consideration of roughly $4.8 billion, together with debt, with Repsol holding the remaining 75%, indicating a complete enterprise worth of roughly $19.0 billion for Repsol Upstream. The corporate will probably be majority managed by Repsol and will probably be consolidated within the accounts of Repsol.
Repsol Upstream is a number one, gas-weighted world E&P firm that may personal and function Repsol’s globally diversified portfolio of upstream belongings, delivering money generative and resilient operations round key regional hubs, with a concentrate on the US. Repsol Upstream is forecast to provide roughly 590,000 barrels of oil equal per day for 2H 2022 and has proved and possible reserves of two.3 billion barrels equal as at December 31, 2021, roughly 70% of which is fuel. Repsol Upstream additionally holds contingent assets of three.8 billion barrels equal as on the similar date.
The enterprise has dedicated to management in lowering greenhouse fuel (GHG) emissions, initially adopting Repsol’s present targets, together with a 75% discount of carbon depth by 2025 from a 2016 baseline, and implementation of a decarbonization plan, together with growth of latest quick and medium-term GHG emissions discount targets. The corporate additionally has a inexperienced exploration enterprise focusing on Carbon Seize and Storage (CCS), geothermal and hydrogen storage initiatives.
Repsol Upstream will keep the enterprise’s present workforce and present administration workforce. The corporate is anticipated to learn from Repsol’s experience as a benchmark upstream operator, in addition to from EIG’s information of worldwide debt and fairness capital markets and upstream expertise, notably in the US, the North Sea, Brazil and Asia Pacific. Repsol Upstream may even profit from EIG’s latest experience derived from its profitable formation, transformation, and public itemizing of Harbour Power. EIG believes the transaction places Repsol Upstream on a pathway in the direction of future market liquidity—each Repsol and EIG foresee the potential to checklist the enterprise within the U.S. from 2026 onward, topic to favorable market circumstances.
“Power transition informs each choice we make, and we’re thrilled to accomplice with a worldwide chief of Repsol’s stature on this compelling alternative to guide change in our trade,” stated R. Blair Thomas, EIG’s Chairman and CEO. “Analysis of ESG influence is built-in into EIG’s core funding and portfolio administration features, and we stay up for working with Repsol, a world-class operator and vitality transition chief, to proceed constructing on the enterprise’s ESG greatest practices. Because the world appears to be like to satisfy the dual objectives of decarbonization and reliability, we imagine this partnership is properly positioned to assist meet the rising world demand for accessible, environment friendly and secure vitality.”
“Our ambition is to guide the vitality transition, and this pioneering settlement permits us to take care of the strategic path of the upstream unit and, on the similar time, to spice up the transformation of the corporate and its multi-energy profile to attain zero internet emissions by 2050,” stated Repsol CEO Josu Jon Imaz.
As a part of the transaction, EIG can have the appropriate to appoint two members to Repsol Upstream’s eight-member Board of Administrators. 4 will probably be nominated by Repsol, with the remaining two as Independents. EIG may even have the appropriate to nominate two senior executives to the Repsol Upstream management workforce, one to function ESG Director and the opposite to guide particular initiatives, together with IPO preparedness.
The transaction is anticipated to shut inside the coming six months, topic to customary closing circumstances.
Goldman Sachs & Co LLC and J.P. Morgan acted as monetary advisors to EIG in reference to the transaction. Goldman Sachs & Co LLC, J.P. Morgan and Lazard are appearing as capital markets advisors in reference to the financing of the transaction. Latham & Watkins serves as EIG’s authorized advisor.
About EIG
EIG is a number one institutional investor within the world vitality and infrastructure sectors with $24.0 billion underneath administration as of June 30, 2022. EIG makes a speciality of non-public investments in vitality and energy-related infrastructure on a worldwide foundation. Throughout its 40-year historical past, EIG has dedicated over $41.5 billion to the vitality sector by way of over 387 initiatives or firms in 38 nations on six continents. EIG’s purchasers embody lots of the main pension plans, insurance coverage firms, endowments, foundations and sovereign wealth funds within the U.S., Asia and Europe. EIG is headquartered in Washington, D.C. with places of work in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul. For extra info, please go to EIG’s web site at www.eigpartners.com.
About Repsol
Repsol is a worldwide multi-energy firm that’s main the vitality transition with its ambition of attaining zero internet emissions by 2050. Current all through the vitality worth chain, the corporate employs 24,000 individuals worldwide and distributes its merchandise in practically 100 nations to round 24 million clients.
To attain zero internet emissions by 2050, Repsol is deploying an built-in mannequin of decarbonization applied sciences based mostly on enhanced effectivity, elevated renewable energy era capability, manufacturing of low-carbon fuels, growth of latest buyer options, the round financial system, and by driving breakthrough initiatives to cut back the trade’s carbon footprint.
