Spain’s oil and gas company Repsol will stop pursuing production growth in its upstream oil and gas division as it is getting ready for the energy transition, Bloomberg reports, quoting a person familiar with the plans, in what would be a first such move by a primarily oil and gas company.
Repsol will unveil a revised business plan in June that would cap its future oil and gas production at the current levels and would prohibit it from keeping more than eight years of oil and gas reserves on its books, according to Bloomberg’s source.
The eight-year reserve life would be shorter than those of many of the bigger oil companies. According to data compiled by Bloomberg, Rosneft has 21 years of reserves life, Exxon 15 years, BP 14 years, Total and Chevron 12 years, and Shell 9 years of reserves life.
Earlier this month, Repsol reported a 43-percent annual jump in its upstream net income in Q1, describing the division’s performance as “outstanding” and saying that its oil and gas production of 727,000 barrels of oil equivalent per day (boepd) was at its highest level since 2012. Of this daily equivalent production, 63 percent was gas and 37 percent – liquids.
Speaking to Bloomberg by phone, Repsol spokesman Kristian Rix said that
“The objective in our current business plan is to maintain production stable.”
Repsol has already signaled that it wants to be known as an energy—not an oil and gas—company, and will pursue wind, solar, and in the future, electric vehicles, chairman Antonio Brufau told the shareholders’ meeting last week.
If Repsol abandons oil and gas production growth, it would be the first of its industry peers to explicitly say so.
Shell, for example, has a New Energies business, and has recently bought a UK utility and Dutch NewMotion, one of Europe’s largest electric vehicle charging providers. Yet, Shell said last month that it would shift from oil “when this makes commercial sense.”
Further north in Europe, Norway’s Statoil dropped ‘oil’ from its name, and is now known as Equinor, and although it will boost investment in renewables, it will still invest the larger part of its capital in oil and gas.