Spanish energy giant loses €1.2 billion in oil price plunge

Spain's oil giant Repsol said on Thursday it had lost €1.2 billion ($1.4 billion) last year after putting aside nearly three billion euros in special provisions for a plunge in crude prices.

Spanish energy giant loses €1.2 billion in oil price plunge
Photo: AFP

The past few months have been trying for companies and countries which produce oil and other commodities, the prices of which have slumped as demand has slowed in China – the motor of global growth in recent years – casting a cloud over the global economic recovery.

Repsol, which acquired Canada's energy firm Talisman last year, added that without the provision, the group would have made a net profit of €1.86 billion last year – a nine-percent rise from 2014.

“This result specifically measures the performance of the business units and demonstrates the company's strength and resilience in the face of adverse situations such as the current low oil and gas prices,” it said in a statement.

Shares in the oil giant – which had already warned the markets of its 2015 loss last month – rose 3.15 percent to 8.85 euros mid-morning on Thursday.

Separately, the group announced it had agreed to sell its offshore wind power business in Britain to China's SDIC Power for €238 million.

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Spanish oil giant Repsol swings back to profit

Spain's oil giant Repsol said on Thursday that it swung back to profit in the third quarter as the company reduced costs to adapt to a slump in oil prices which has hit production revenues.

Spanish oil giant Repsol swings back to profit

The company posted a net profit of €481 million ($$535 million) in the July-September period, compared to a net loss of 221 million euros in the same year-ago period.

The result was higher than forecast by analysts polled by Factset who predicted the company would table a net profit of €308 million.

“The efficiency and savings measures implemented by Repsol throughout the year improved earnings and bolstered the company's resilience to the current environment of depressed crude oil and gas prices,” the company said in a statement.

Repsol in October 2015 unveiled an ambitious cost-cutting programme outlined in October 2015 which involves slashing billions from capital spending by 2020 and slashing 1,500 jobs by 2018.

The company said lower spending on exploration helped it to drastically reduce its loss in its upstream operations to €28 million from €395 million in the third quarter of 2015 despite the slump in oil and gas prices.

In its downstream operations, which includes refining, earnings fell 42 percent in the third quarter to 395 million euros from a year earlier due to lower margins, the company said.

During the first nine months of the year Repol's posted a net profit of €1.12 billion, a 35 percent increase over the same time last year.

Oil prices have recovered to around $50 a barrel since producers cartel OPEC agreed at the end of September to cap output in a bid to tackle an oversupply that has hammered prices.

Nevertheless, crude prices are still only about half their mid-2014 levels.