Bloomberg News

Repsol Agrees to Acquire Russia’s Eurotek for $230 Million

January 03, 2012

(Updates with analyst comment in fourth paragraph.)

Dec. 29 (Bloomberg) -- Repsol YPF SA, Spain’s largest oil producer, agreed to buy Russian explorer Eurotek for about $230 million to expand its international business.

Repsol will incorporate Eurotek’s assets in western Siberia into its new Russian venture with Alliance Oil Co., the Madrid- based company said today in a statement. It agreed this month to form a $840 million partnership with Moscow-based Alliance, which will contribute assets in the Volga-Urals region.

The Spanish company is investing in assets abroad, including in Russia, Brazil and the U.S., to drive output growth and reduce reliance on mature fields in countries such as Argentina, while countering the effect of fluctuating refining margins at home.

“It’s good that Repsol is diversifying and becoming a real oil company instead of simply being a refiner,” said Christine Tiscareno, a London-based oil analyst at Standard & Poor’s.

Repsol rose as much as 2.4 percent to 23.40 euros in Madrid trading, and was at 23.39 euros as of 5:01 p.m. local time.

The Eurotek transaction gives Repsol the Syskonsyninskoye gas field, which is at an “advanced” stage of development, and the Yuzhno-Khadyryakhinskoye deposit, the Spanish company said. As a result of the deal, Repsol will transfer 115 million barrels of oil equivalent in proven and probable reserves to its venture with Alliance in 2012.

The venture with Alliance is 49 percent-owned by Repsol and 51 percent by the Russian company.

On Dec. 22, Repsol said it would spend $250 million to buy a share in SandRidge Energy Inc.’s oil and gas fields in Kansas and Oklahoma to boost reserves and production.

--With assistance from Stephen Bierman in Moscow. Editors: Amanda Jordan, Jasmina Kelemen

To contact the reporters on this story: Charles Penty in Madrid at cpenty@bloomberg.net; Manuel Baigorri at mbaigorri@bloomberg.net.

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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