Repsol reaffirms Venezuela plans as crude cargoes rise

Spanish oil firm Repsol has vowed to continue its operations in Venezuela despite the country's deepening economic crisis and the crippling effects of US sanctions.

Repsol CEO Josu Jon Imaz said Wednesday that payments from an oil-for-debt deal rose in the first half of 2019, reducing the company's financial exposure in the South American country.

"It's true that it's not an easy business environment, [but] in the first half of the year we've received reasonably regular crude oil cargoes as payment for debts and our production is in line with forecasts," Imaz told analysts in a quarterly earnings call."

The Madrid-based company has received four cargoes related to the Cardón IV gas joint venture with Italy's Eni, representing 45% of the total owed in the first seven months for the block.

Deliveries of "roughly" one cargo per month for the Petroquiriquire joint venture have also been made in 2019, according to Imaz. 

As a result, Repsol's exposure to Venezuela was reduced to US$447mn on June 30 from US$522mn at the end of 2018. 

"It's not bad when compared to last year," Imaz said. "The receivable side has been more or less stable."

He added: "I reaffirm our willingness to continue with our businesses in the country. Our main objective is to protect all of the 150 workers we have in the country and guarantee the safety of the operations. 

"It's a complex situation [but] we're complying fully with local and international laws and... continue monitoring events that could potentially change our activities."

Repsol's January-June oil and gas production in Venezuela averaged 59,000boe/d, down from 62,000boe/d in the same period of last year. The company's global output fell 4% year-on-year to 697,000boe/d. 

Imaz said declining output in Libya, Venezuela, Trinidad & Tobago and the US was partially offset by new volumes in Colombia, Canada and the US Gulf of Mexico, as well as acquisitions in Norway. 

Repsol said it would drill eight exploration wells in the second half of 2018, including one at the Kanuku prospect in Guyana. 

In Brazil, the company plans to carry out appraisal drilling in the Sagitário area by the end of September. 

A second appraisal well is also slated for this year at the Leon discovery in the Keathley Canyon 642 block off the US state of Louisiana.