Repsol to boost renewables fivefold, cuts dividend for 2021

Bloomberg

Repsol SA will reduce its dividend next year after outlining plans to wind down the search for oil and expand its renewable capacity fivefold during the next decade.
The Spanish company, which was the first oil major to set a net-zero emissions target a year ago, will put its projects into “harvest mode” as it refocuses on higher-value oil production in fewer countries. While the dividend will be lower in 2021, it will be paid out entirely in cash, unlike the current distribution which is given as new shares. Repsol expects to start growing the payment again from 2023.
Repsol’s decision last December to write down the value of its oil assets by 4.8 billion euros ($5.7 billion) and promise to eliminate net emissions of greenhouse gases from its operations by 2050 was the first step in a dramatic shift for the oil industry. It plans to funnel cash from the petroleum business into an expansion of renewable capacity to 15 gigawatts — including wind and solar — from the current 2.95 gigawatts.
The “new strategic plan highlights the continued shift in focus to renewables from oil,” said Salih Yilmaz, an energy analyst at Bloomberg Intelligence. “The move is expected to be self-financing with Brent at
$50 a barrel.”
Repsol’s new strategy also includes a concrete target for green-hydrogen production, setting it apart from other oil producers. Most companies argue this fuel is not yet cost-effective, but Repsol CEO Jon Josu Imaz said the company could produce
renewable hydrogen 30% cheaper than others in Spain. The company is seeking to align itself with the government’s aim of transforming the country
into a key European hub for hydrogen shipments, and Repsol aims to produce more than
1.2 gigawatts in 2030.
Repsol’s early move on emissions cuts has been followed,
or bettered, by larger European rivals, including Total, Royal Dutch Shell and BP, although the US majors remain committed to fossil fuels.