Repsol unveiled its strategic plan for the years 2021 to 2025, during which it will advance in its net zero emissions objective with a project that accelerates transformation while maintaining a strong cash flow to finance ambitious growth and attractive shareholder distribution.
The company will decarbonise its asset base and implement a new operating model that will extract value from its current strengths as well as add new pillars to support the company’s future such as the Customer and Low-Carbon Generation Businesses. By 2030, Repsol will be a company that is renewed, more sustainable, and more focused.
Josu Jon Imaz, Repsol Chief Executive Officer: “With this new Strategic Plan, which leverages our strengths, we are taking a significant step towards becoming a net zero emissions company, outlining a profitable and realistic roadmap that will allow us to grow, maximize value for our shareholders, and assure the future.”
The new strategy will be highly flexible in relation to the macroeconomic environment. It is being set in motion at a time of historic difficulty to which Repsol already responded with its Resilience Plan 2020 that produced positive cash flow in every business in the first nine months of the year and estimated savings for the whole year of €2.4 billion.
In this highly uncertain environment, the company has established two differentiated periods in its Strategic Plan. In the first two years, it will focus on ensuring financial strength, extending the efficiency and competitivity programs which began in March of this year.
The Strategic Plan is self-financing at an average $50 per barrel of Brent and $2.5 per MBtu at the Henry Hub. At these prices, the company can maintain a high degree of financial flexibility and keep debt unoichanged from current levels through 2025.
During the first period of the plan, efficiency, investment cuts, and optimisation of capital will be prioritised together with projects to lead the energy transition, including those already announced for the Bilbao and Cartagena refineries and the numerous renewable energy projects that Repsol is currently building. From 2022, with recovery from the impact of COVID-19, the focus will shift to the acceleration of growth.
A total of €18.3 billion will be invested during the new five-year plan. Low-carbon spending will reach €5.5 billion between 2021 and 2025 – 30 per cent of the total – which will be accompanied by a continued international expansion.
Imaz added: “Our strategy is based on a multi-energy offering that combines all the technologies for decarbonisation of energy. We will be more efficient and increase our renewable energy objectives as well as our manufacture of products with a low, neutral, or even a negative carbon footprint. We will promote circular economy initiatives, develop new energy solutions for our customers, and boost cutting-edge projects to reduce the industry’s carbon footprint.”
Repsol stated that in a scenario of continued higher prices, it will accelerate the growth of low-carbon projects in its portfolio.