SPAIN´S oil company Repsol revealed plans on Thursday October 15 to sell 6.2 billion euros in non strategic assets and cut spending over the next five years.
The five year strategic plan comes after the recent drop in oil prices which has forced many other energy companies to make similar decisions.
In May Repsol finalised a €7.3 billion takeover of competitor Talisman. The expansion led to increased borrowing for the company which meant that a debt reduction plan was necessary so rating agencies would not downgrade Repsol´s credit rating.
A Repsol statement said, “The flexibility, strength and adaptability of its asset portfolio will allow Repsol to undertake divestments of 6.2 billion euros in non-strategic assets and cut spending by 38 per cent without altering its company profile.”
Earlier in the month the company announced plans to cut 6 per cent of its employees, 1,500 jobs, in the next three years.
The efficiency strategies which include delaying spending on any new projects and amending supplier costs are expected to create 2.1 billion euros in savings each year.
Repsol said the plan means they will “be able to generate cash flow to finance its investment needs, maintain dividends and pay off debt.”
They also revealed an expected 22 per cent drop in net profit this year to between 1.25 billion and 1.5 billion euros.