Spanish oil firm Repsol has reported a full year 2016 net profit of 1.7 billion euros, up from a net loss of around 1.4 billion euros a year ago.
According to Repsol, this is the company’s highest annual net income in the last four years, boosted by the company’s successful execution of its efficiency program as it has managed to cut its operational costs by 1.6 billion euros.
The company’s upstream segment also posted a net profit. The Upstream net profit was 52 million euros, a hefty increase compared to a loss of 925 million euros in 2015.
Repsol CEO Josu Jon Imaz said that 2016 was a very demanding year.
“Firstly, because of market volatility. Secondly, because it has been a year with low oil and gas prices. In this environment, Repsol has shown that it is able to create value at $43 per barrel Brent, and that with these prices and throughout its business, it is able to generate cashflow in organic terms after paying dividends to its shareholders.
“All this has been possible, first of all, thanks to an efficiency program. We have reduced our operational costs by more than €1.600 billion and we have beaten by 50% the already ambitious goal we had set in our Strategic Plan. Secondly, thanks to exhaustive control of CAPEX, investments,” the CEO said.
Average production increased 23% in the year to 690,200 boe/d, mainly the result of contributions from assets in Brazil, Norway, Venezuela, North America and Peru.
In late December, Repsol resumed operations in Libya. At the current rate of production, this activity yields an additional 20,000 barrels of oil equivalent per day for Repsol. In 2016, Repsol increased its oil and gas reserves to 2.382 billion barrels of oil equivalent, with a replacement rate of 103%.
Repsol said the reserves and projects already underway guarantee average production of 700,000 barrels per day through 2020, which will be maintained through 2025 by other discoveries already made and whose development will start in the next two years. In parallel with this production, the company will maintain a 100% average reserve replacement rate through 2020.