The largest Spanish oil company, Repsol, paid last year just over 1,336 million euros in taxes and production rights to the countries from which it extracts crude oil and gas. The figure is large, but 20% lower than that of 2022, when it paid 1,603 million. The bulk of what was transferred in 2023 (929 million) corresponds to taxes, while almost 397 million were rights on production (all of them in Bolivia) and just over nine million corresponded to “licenses, rentals, access rights and other benefits”.
By geography, Latin America was once again the main destination of these funds: 644 million, almost half of the total, went to the region, with Bolivia (418 million) and Peru (210) as the most notable countries, followed by a lot of distance through Mexico (10), Colombia (just over three) and Brazil (just over two). By nation, however, Norway—the second largest oil and gas producer on the Old Continent, only behind Russia—was the country that received the most money from the company it presides over. Antonio Brufau: 424 million, almost a third of the total, according to the figures sent to the National Securities Market Commission (CNMV).
Outside of Latin America and Europe, three other countries received money from Repsol in exchange for allowing the extraction of hydrocarbons: the United States (130 million euros), Canada (just over six, although they will be the last: Last September it announced the sale of all its exploration and production assets to focus on its southern neighbor) and Indonesia (the largest oil power in Southeast Asia, to which it paid 132 million).
Eight fewer countries in four years
These figures show a change in pattern in recent years: the nine countries that received royalties from Repsol in 2022 and 2023 are five less than in 2021 and six less than in 2020, the year of confinement. A year before the pandemic, in 2019, there were even more: 17, with a total payment volume of over 2 billion euros. This gradual shrinkage responds to the oil company's strategy of concentrating its operations in fewer countries, preferably in the region's surroundings. Organization of Countries for Economic Cooperation and Development (OECD). That is, advanced economies, with more predictable governments and in which – therefore – the regulatory risk is much lower.
Wall Street on the horizon
In recent years, the exploration and production business has lost weight in Repsol's income statement. If in 2019, just before the pandemic, it contributed almost half of its net income, last year it was around 35%. In September 2022—with the price of crude oil beginning to relax after exceeding $120 per barrel of Brent in the first months of the Russian invasion of Ukraine—the oil company sold a quarter of its subsidiary upstream to the US energy and infrastructure fund EIG in exchange for 4,850 million euros, at the then exchange rate.
At that time, the oil company it was already airing the possibility that this division would begin trading on Wall Street in the medium term: at the beginning of 2026. An option in which the CEO of the oil company, Josu Jon Imaz, stopped this Thursday, after surprising the market with better than expected results and seeing its price skyrocket. “It is not a beloved business in Europe and, if what we want is to extract value for our shareholders, the valuation multiples of the companies [del sector] “They are much higher in the United States,” he said. “But the end is as important as the path: meanwhile, we continue to improve our exploration and production portfolio, the type of countries we are in and the contribution margin of each one… Making our portfolio, in short, more understandable for an Anglo-Saxon investor.”
Follow all the information Five days in Facebook, x and Linkedinor in our newsletter Five Day Agenda
The Five Day agenda
The most important economic quotes of the day, with the keys and context to understand their scope
To continue reading this Cinco Días article you need a Premium subscription to EL PAÍS
_
#Repsol #reduced #payments #countries #extracts #crude #oil #gas #billion