- CEO prioritises resuming normal operations over debt recovery
- Plans to hike oil output by 50% within year, triple it in 3 years
- Debt provisions at around 3.59 billion euros
- Company active in Venezuela for over three decades despite debt
MADRID, Feb 19 (Reuters) - Energy group Repsol is owed 4.55 billion euros ($5.37 billion) by the Venezuelan state, the Spanish company said in its annual report on Thursday, disclosing the figure for the first time.
Repsol has been active in Venezuela for over three decades, has staff on the ground and is an important partner of state energy firm PDVSA. It is one of the companies allowed to run oil and gas operations in Venezuela under a general licence recently issued by the U.S. Treasury Department's Office of Foreign Assets Control.
Until March last year, Repsol had a permit from U.S. authorities to receive oil from PDVSA as payment for debt. That permit was revoked in March.
While recouping the outstanding debt has long been an important issue, CEO Josu Jon Imaz said that it wasn't Repsol's main priority at the moment.
"I think now it's time to recover a normal commercial operation, which means being paid for the production we have," Imaz told analysts on the company's annual earnings call, pointing to investment to increase oil and gas production in the South American country.
RAMP-UP IN OUTPUT
Repsol has stakes in Venezuela's oil and gas fields. It is working to increase the daily amount of gas it produces and supplies there by 10% to around 640 million cubic feet, Imaz said, without giving a timeframe.
As for oil, Repsol can increase output by 50% in 12 months and triple it within three years, he said. Production last year averaged 71,300 barrels of oil equivalent per day.
"If Venezuela recovers normal production levels, if the economic development of the country evolves in the right way, I'm sure we're going to find frameworks and solutions to talk about the past," he said, referring to the debt.
The 4.55 billion euros - which is significant for a company with a market cap of under 20 billion euros - includes commercial debt tied to oil and gas supplies plus accumulated interest, and 947 million euros in financing for its Petroquiriquire joint venture with PDVSA, the report shows.
Repsol has provisions set aside of around 3.59 billion euros in relation to the debt. Its total equity exposure in Venezuela was 276 million euros at the end of last year, the report showed.
($1 = 0.8475 euros)
Reporting by Pietro Lombardi; Editing by David Latona, Kirsten Donovan
Source: Reuters