EIG to Acquire 25% Of Repsol’s Entire Global Upstream Business in New Partnership

EIG, a number one institutional investor in the worldwide vitality and infrastructure sectors, right this moment introduced that it has entered right into a definitive settlement with Repsol S.A. (“Repsol”) to purchase a 25% stake in Repsol Upstream, a newly-formed world exploration & manufacturing (“E&P”) firm comprising Repsol’s complete world upstream oil and gasoline business. The strategic partnership delivers upfront capital to Repsol to enhance its funding in the vitality transition, particularly to assist the expansion of Repsol’s renewable energy era, renewable fuels, and round merchandise segments.

Under the phrases of the settlement, a newly fashioned, wholly owned subsidiary of EIG, Breakwater Energy, will purchase the 25% curiosity in Repsol Upstream for complete 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 firm will probably be majority managed by Repsol and will probably be consolidated in 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 property, delivering money generative and resilient operations round key regional hubs, with a concentrate on the United States. Repsol Upstream is forecast to produce 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 gasoline. Repsol Upstream additionally holds contingent assets of three.8 billion barrels equal as on the identical date.

The business has dedicated to management in lowering greenhouse gasoline (GHG) emissions, initially adopting Repsol’s current 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 brief and medium-term GHG emissions discount targets. The firm additionally has a inexperienced exploration business concentrating on Carbon Capture and Storage (CCS), geothermal and hydrogen storage tasks.

Repsol Upstream will keep the business’s present workforce and current administration workforce. The firm is anticipated to profit 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 United States, the North Sea, Brazil and Asia Pacific. Repsol Upstream can even profit from EIG’s current experience derived from its profitable formation, transformation, and public itemizing of Harbour Energy. EIG believes the transaction places Repsol Upstream on a pathway in direction of future market liquidity—each Repsol and EIG foresee the potential to listing the business in the U.S. from 2026 onward, topic to favorable market circumstances.

“Energy transition informs every decision we make, and we are thrilled to partner with a global leader of Repsol’s stature on this compelling opportunity to lead change in our industry,” stated R. Blair Thomas, EIG’s Chairman and CEO. “Evaluation of ESG impact is integrated into EIG’s core investment and portfolio management functions, and we look forward to working with Repsol, a world-class operator and energy transition leader, to continue building on the business’s ESG best practices. As the world looks to meet the twin goals of decarbonization and reliability, we believe this partnership is well positioned to help meet the growing global demand for accessible, efficient and safe energy.”

“Our ambition is to lead the energy transition, and this pioneering agreement allows us to maintain the strategic direction of the upstream unit and, at the same time, to boost the transformation of the company and its multi-energy profile to achieve zero net emissions by 2050,” stated Repsol CEO Josu Jon Imaz.

As a part of the transaction, EIG may have the proper to nominate two members to Repsol Upstream’s eight-member Board of Directors. Four will probably be nominated by Repsol, with the remaining two as Independents. EIG can even have the proper to appoint two senior executives to the Repsol Upstream management workforce, one to function ESG Director and the opposite to lead particular tasks, together with IPO preparedness.

The transaction is anticipated to shut throughout 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 performing 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 in the worldwide vitality and infrastructure sectors with $24.0 billion below administration as of June 30, 2022. EIG specializes in personal investments in vitality and energy-related infrastructure on a worldwide foundation. During its 40-year historical past, EIG has dedicated over $41.5 billion to the vitality sector via over 387 tasks or firms in 38 nations on six continents. EIG’s purchasers embrace lots of the main pension plans, insurance firms, endowments, foundations and sovereign wealth funds in the U.S., Asia and Europe. EIG is headquartered in Washington, D.C. with workplaces in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul. For further data, 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. Present all through the vitality worth chain, the corporate employs 24,000 individuals worldwide and distributes its merchandise in almost 100 nations to round 24 million clients.

To obtain zero internet emissions by 2050, Repsol is deploying an built-in mannequin of decarbonization applied sciences primarily based on enhanced effectivity, elevated renewable energy era capability, manufacturing of low-carbon fuels, growth of latest buyer options, the round economy, and by driving breakthrough tasks to cut back the trade’s carbon footprint.

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