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ENERGY

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.

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ENERGY

German households to receive relief for gas costs ‘starting in January’

To help German residents with skyrocketing energy costs, the government is planning to provide relief starting in January, according to draft legislation.

German households to receive relief for gas costs 'starting in January'

Through the gas price cap, the so-called Gaspreisbremse, both German residents and companies will receive retrospective relief for their gas costs starting in January 2023, according to the draft. 

Previously the relief payments were set to stretch between March 2023 and spring 2024, with 25,000 larger businesses, as well as almost 2,000 hospitals and schools to receive the help starting in January. 

READ ALSO: How much could households save under Germany’s new price cap?

The German government is reacting to the sharp rise in energy prices with energy price brakes worth billions and wants to soften the blow on both private households and companies. 

Germany will also be divvying out a one-off energy relief payment in December.

READ ALSO: When will people in Germany get their December gas bill payment?

How much will households and businesses receive?

Under the gas price cap, households and small and medium-sized enterprises are to receive a guaranteed gas gross price of 12 cents per kilowatt hour for 80 percent of their current consumption. For the remaining 20 percent of consumption, the contract price is set to apply.

For district heating, the guaranteed gross price is to be capped at 9.5 cents. 

Starting in January, a gas price brake is also planned for industry. These large consumers are to receive a guaranteed price of 7 cents per kilowatt hour net for 70 percent of their previous consumption volume.

The largest part of the energy price brake is to be financed by a “defence umbrella”, or special reserve, totalling up to €200 billion. The government is still taking on new debt in order to finance the energy caps. 

Russia’s war against Ukraine has increasingly aggravated the situation on the energy markets in Germany and Europe in the course of 2022, the draft states. 

In particular, the recent large price increases for natural gas and heat represent a “considerable, in some cases existence-threatening burden for residents and companies in Germany,” it continued. “They are an enormous socio-political and economic challenge.”

Vocabulary

relief – (die) Entlastung

Natural gas – (das) Erdgas

Consumption – (der) Verbrauch

cushion/soften a blow – abfedern

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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