Repsol Said to Weigh Sale of Gas Assets in Papua New Guinea

Updated on
  • Spanish oil giant considers divesting Foreland basin permits
  • Repsol acquired Papua New Guinea permits through Talisman deal

Repsol SA, Spain’s largest oil company, is weighing a sale of the Papua New Guinea gas exploration assets it acquired through the purchase of Talisman Energy Inc., according to people with knowledge of the matter.

Repsol has been assessing a possible divestment of its permits in the South Pacific nation’s Foreland basin, the people said, asking not to be identified because the details are private. The Spanish company bought Canada’s Talisman last year for about $13 billion including debt.

The Madrid-based company has joined peers including Royal Dutch Shell Plc and BP Plc in cutting exploration costs, firing staff and slashing spending as it seeks to weather lower crude prices and cut debt. Repsol has sold assets including a British wind-farm project, handed over field operations to partners and said it would reduce its dividend.

Repsol rose 0.6 percent to 12.25 euros at 10:18 a.m. in Madrid. The shares are up 21 percent this year.

A representative of Repsol declined to comment.

PNG Investments

Papua New Guinea has attracted billions of dollars of energy investment led by Exxon Mobil Corp.’s $19 billion PNG LNG development, which began operating in 2014. Sydney-based Oil Search is a partner in the plant with a 29 percent stake. Exxon agreed in July to buy gas explorer InterOil Corp. for as much as $3.6 billion to add discoveries in Papua New Guinea that may feed its existing plant.

Repsol has rights over eight exploration blocks covering an area of 12,338 square kilometers (4,764 square miles) in the country, according to its website. It also operates one block in production with an area of 361 square kilometers.

Repsol is also said to be weighing the sale of part of its stake in Gas Natural SDG SA to Global Infrastructure Partners, people familiar with the matter said earlier this week.

(Updates with shares in fourth paragraph, Gas Natural in last paragraph.)
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