Repsol posts 3Q profit on upstream cost cuts

Spanish oil company Repsol has returned to profit in the third quarter of 2016. The company’s net income for the quarter was 481 million euros, up from the 221 million euro loss recorded in the third quarter of 2015.

Adjusted net income in the third quarter was €307 million, 93% higher year‐on‐year.

The result was boosted by the Upstream segment, which recorded adjusted net loss of 28 million euros, but was still an improvement of €367 million compared to the same period in 2015, when it reported a loss of almost 400 million euros.

Repsol said Upstream has improved on lower exploration expenses, lower technical amortization rates and lower costs. This was partially offset by lower realized oil and gas prices and a negative tax effect from the mix of fiscal environments partially compensated by the effect, in the third quarter of last year, of local currencies devaluation.

Upstream production averaged 671 kboe/d in the third quarter of 2016, 3% higher year‐on‐year.

This was, Repsol said, primarily due to the ramp‐up of the Cardón IV project in Venezuela and Sapinhoá in Brazil, higher production in Perú and acquired production from Gudrun in Norway.

In Downstream, adjusted net income was €395 million, 42% lower year‐on‐year because of lower margins obtained in the quarter in the Refining and Chemicals while the Commercial businesses, Marketing and LPG, remained stable.

On the savings plans, by the end of the third quarter, over 98% of the initial full-year target of €1.1 billion had been achieved, Repsol said, adding that it would raise its our forecast savings from the program to €1.4 billion in 2016.

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