Repsol SA plans to sell a 4.6 billion-euro ($6.1 billion) stake in Spain’s largest natural-gas distributor before using the funds to make an acquisition in the U.S., a person briefed on the strategy said.
Repsol is likely to sell its 30 percent holding in Gas Natural SDG SA next year, giving the Madrid-based oil company the financial firepower to add reserves and production in the U.S., the person said, asking not to be named as the plan isn’t public. No formal sales process for the Gas Natural stake has started and there’s no guarantee a deal will be completed.
A Repsol official declined to comment.
Spain’s largest oil producer is reformulating strategy after Argentina seized the company’s YPF unit last year, forcing Repsol to delay plans for expansion in North America. Chief Financial Officer Miguel Martinez said in July the rationale for owning a stake in Gas Natural disappeared after the sale of the company’s liquefied natural gas unit to Royal Dutch Shell Plc.
Repsol has exploration and production assets in Alaska and the U.S. Gulf of Mexico as well as a stake in a shale project in Mississippi. It’s strengthening its portfolio in the U.S. as part of a strategy to expand in countries of the Organization of Economic Cooperation and Development, Repsol’s website shows.
The company sold its LNG business, excluding a Canadian import terminal, to Shell in February for $4.4 billion. The deal, expected to complete by the end of the year, was part of a program to boost financial strength after the loss of YPF.
Under its current strategic plan, running until 2016, Repsol aims to replace 120 percent of the oil reserves it uses and increase production at least 10 percent a year, outstripping larger competitors including Shell and France’s Total SA.