Repsol's (REPYY.PK) board has approved the company's 2012-2016 strategic plan and Chairman Antonio Brufau's proposal to rejig the management structure.
The strategic plan presented Tuesday includes an investment program of 19 billion euros, earmarked mostly for the upstream unit. The Spanish oil major expects to double its net profit in the next five years from 2011, excluding YPF.
In May, Argentina nationalized Repsol's YPF unit - the country's largest oil firm. Reports surfaced Tuesday that Repsol will cut its dividend payout. Bloomberg said the cut is aimed at defending Repsol's credit rating after Argentina's seizure of YPF SA.
Repsol plans to fund the "ambitious" investment program with its own cash and divestments. The company highlighted it will carry out selective divestments of non-core assets worth between 4 billion and 4.5 billion euros.
Repsol expects the upstream unit to drive growth, representing almost 80 percent of the total investment over the period.
The plan also envisages a 1.9-times increase in operating profit from 2011 levels, excluding YPF, mainly through activity in the upstream business and cash generation from the downstream and the LNG business units.
The company expects development of the upstream projects to result in an annual production growth rate of 7 percent.
As per the new management changes, Brufau, who was the Chairman and CEO, will now become the Executive Chairman, leaving the CEO position vacant.
Nemesio Fernandez-Cuesta, the executive director of the upstream unit, will become the Chief Operating Officer of the company. Miguel Martínez San Martín will continue as the Chief Financial Officer.
The company has also created a General Direction for Strategy and Control led by Pedro Fernandez Frial, who was the Executive Director for Downstream business. It also named Luis Cabra as the new Executive Director for Exploration and Production and Josu Jon Imaz as Executive Director for Industrial and New Energy Unit.
In the recently concluded first quarter, Repsol's net profit, including YPF, rose 3.5 percent mainly due to the improvement of crude oil and gas realization prices. Excluding YPF, net income grew 12.4%.
In Madrid, Repsol shares are currently trading at 13.80 euros, down 0.02 euros or 0.11 percent on a volume of 944,798 shares.
For comments and feedback: editorial@rttnews.com