Repsol closes the litigation it had with the Chinese oil company Sinopec for 5.1 billion euros

Repsol has managed to settle the war that it had with one of the largest Chinese oil companies Sinopec in the joint venture that both had in the United Kingdom, Repsol Sinopec Resources UK (RSRUK), and that had open litigation valued at 5,500 million dollars (5,100 million euros ).

The agreement communicated to the National Securities Market Commission (CNMV) closes this legal battle with the acquisition of 49% of RSRUK that Sinopec owned until now for an amount of 2,100 million dollars) (1,903 million euros), of which the The Spanish company will only disburse 1,100 million dollars (about 998 million) in cash, since the rest is part of the treasury available in the acquired Chinese package.

“The transaction will not have a significant impact on the results”, since in addition to the aforementioned treasury of the Chinese package, Repsol endowed a provision of 779 million euros in its latest accounts.

With this operation, the company chaired by Antonio Brufau closes a long and complex dispute related to the acquisition by Sinopec of its stake in RSRUK from the Canadian group Talisman. In 2015, Repsol acquired 51% of RSRUK.

Sinopec, which owned the other 49% of the company, filed an arbitration claim against Repsol a year later, claiming investment commitments of $5.5 billion that it had acquired with the previous owners.

Since then, both companies have been facing each other in international courts with successive awards in favor of both, as explained last Thursday by Repsol’s CEO, Josu Jon Imaz, when asked about this matter during the conference with analysts to present the results of the company.

The agreement announced yesterday confirms the intention commented by Imaz “to settle the conflict with a strategic partner for Repsol”. It so happens that despite the confrontation between the two companies, Repsol and Sinopec are strategic partners in countries like Brazil.

With the conflict in the United Kingdom settled, Repsol is free to develop its strategy in that country and consolidate its production portfolio in OECD countries, as contemplated in its strategic plan. RSRUK has 11 offshore crude production facilities connected to 48 fields in the North Sea and two onshore terminals. It produces about 40,000 barrels a day, 40% gas. In addition, it is one of the main producers of green hydrogen in the United Kingdom and has carbon storage projects, a technology that is highly promoted by the United Kingdom government.