Repsol ‘on track’ with Mexico downstream build-out

Repsol is on track to reach 330 service stations in Mexico in the coming months, up from the current 250, according to the Spanish group’s CEO Josu Jon Imaz.

The executive made the comment during the Madrid-based company’s third quarter results call on Thursday.

Imaz said, however, that Repsol is taking a prudent, paced growth approach in Mexico due to COVID-19 challenges.

He added that beyond politics, the country is a stable, business-friendly market.

Repsol’s Mexico footprint includes upstream hydrocarbons acreage and earlier this year the group reported oil discoveries at offshore block 29.

When asked about group-wide exploration, the CEO said “we're not going to be in the frontier areas, and we're going to concentrate our exploration in areas where we have clear capabilities, where we know the area and where we have facilities…to guarantee that we're going to have synergies and we're going to have the returns and we're going to be able to put these resources in operation in the short term.”

Imaz said that further upstream guidance such as geographic markets will be discussed during Repsol’s capital markets day on November 26.

During his presentation, the CEO pointed to the start of work on the Matapal offshore project in Trinidad and Tobago where first gas is expected in 2022.

Another development that Imaz highlighted was Repsol’s venture into renewable energies and this month's close of the previously announced Chile joint venture deal with Ibereólica.

The executive said that the Chile agreement is a “good example” of how Repsol will structure expansion on this front and that potential actions include an IPO for the business in the future.

Imaz said that storage and hydrogen will be a “very important” component of Repsol’s renewables push.

Repsol’s latest earnings release is available here and the earnings report at this link.

ECUADOR

In a related development, Ecuador’s energy and non-renewable natural resources ministry has denied a request from Repsol to transfer its rights and obligations for onshore blocks 16 and 67 to New Stratus Energy.

In a statement, the ministry said that after analyzing documents submitted by Repsol, it “evidenced technical and economic aspects that do not ensure the continuity of operations in these fields.”

Regarding the transfer of Repsol’s indirect stake in oil pipeline operator OCP, the ministry said this is under review.

Read New Stratus Energy announces significant upstream and midstream potential acquisition in Ecuador