Repsol Focuses on US for Short-Term Upstream Growth

Repsol SA has allotted around 80 percent of its planned investment in upstream activities in 2026-28 to the United States.

The Spanish energy company announced Tuesday an investment package of up to EUR 10 billion ($11.61 billion) across operations. Of that, 55 percent has been earmarked for Spain and Portugal and 34 percent for the U.S.

The bulk of the upstream portion of EUR 2.6-3 billion would go to the U.S., “a country that leads growth in the short term, through projects in Alaska, in unconventional assets and off the south coast”, Repsol said in a statement for its investor day on Tuesday.

“The first phase of Pikka (Alaska), one of the largest onshore discoveries in the United States in recent decades, will come online in the coming months and will add an estimated net production of 30,000-35,000 barrels of oil equivalent per day (boed) in 2028”, Repsol said.

Pikka Phase I has a gross capacity of 80,000 barrels of oil per day, according to operator and 51 percent owner Santos Ltd of Australia. Repsol holds 49 percent. Santos announced the final investment decision in 2022 with a budget of $2.6 billion gross, of which $1.3 billion would be borne by the operator.

Repsol said Tuesday it also expects to raise production at the Leon-Castile fields offshore Louisiana to 20,000 boed gross “in the short term”.

The Leon-Castille consortium put the project into production last year, as announced by Repsol September 29, 2025. The project’s Salamanca floating production unit (FPU), which sits in a water depth of about 6,400 feet in the Keathley Canyon 689 area, represents the first refurbishment of a production facility in the Gulf of America, according to Repsol. The FPU has an initial capacity of 60,000 barrels per day of crude and 40 million cubic feet per day of natural gas, it said.

Repsol owns 50 percent in Leon, 35.62 percent in Castile and 2.5 percent in the Salamanca FPU.

Repsol’s 2026-28 upstream investment in the U.S. also includes activities to raise production from unconventional assets in the Marcellus in Pennsylvania and Eagle Ford in Texas.

“Alongside the United States, Repsol has an attractive portfolio of projects in other countries, such as the United Kingdom, where net production is estimated to reach 55,000-60,000 boed in 2026 through Neo Next+, the joint venture with NEO Energy and TotalEnergies UK in the North Sea”, Tuesday’s statement said.

“And in Brazil, Raia (BM-C-33), in the Campos basin, has the potential to become one of the country’s most important sources of natural gas. It is expected to come online in 2028 and reach a net production of 40,000-50,000 boed by 2030.

“With all these projects, net production is projected to reach between 580,000 and 600,000 boed in 2028, between 6 percent and 10 percent higher than in 2025. Around 40 percent will come from the United States.

“Repsol will continue to work to increase the quality and profitability of the barrels produced, doubling the operating cash flow per barrel through 2028.

“Reducing the carbon intensity of barrels is also a priority, with a goal of reducing emissions to 10 kilograms of CO2 per barrel”.

It added, “These projections for 2028 could be increased by potential improvements in the situation in Venezuela, where the company has a privileged position due to its historical presence, and the new licenses issued by the U.S. authorities allow the resumption of oil and gas operations in the Caribbean country”.

“Additionally, the award of new exploration blocks in the recent licensing round in Libya will open a new stage of growth and strengthen Repsol’s presence in this country in the long term”, Repsol said.

Renewable Fuels

For its Industrial business, Repsol has allocated EUR 3.9-4.1 billion of its 2026-28 investment plan. Forty percent of the Industrial investment would go to “low-emission initiatives, such as the production of renewable fuels and hydrogen”.

Repsol is aiming to grow its renewable fuel production to 1.5 million metric tons a year by 2028. It expects to start up one of its renewable fuel projects, located in Puertollano, Spain, in the second quarter with a capacity of 200,000 metric tons per annum.

“This positions Repsol as the main producer of renewable diesel and sustainable aviation fuel (SAF) in Spain and Portugal and as one of the leaders in Europe, contributing more than 70 percent of the production in both countries and more than 10 percent in the European Union as a whole”, Repsol said.

“In 2025, more than 90 percent of the renewable diesel and SAF produced has been traded through the company’s own channels.

“The company is also making progress in the synthetic fuels demo plant in Bilbao, which will be fully operational in 2027, as well as with Ecoplanta in Tarragona, which is set to be commissioned in 2029 after an investment of more than EUR 800 million. This facility, a trailblazing project in Europe, will transform urban waste into 240,000 metric tons of renewable and circular methanol every year”.

Repsol said it is already “the largest producer and consumer of hydrogen in Spain and Portugal, and it will progressively replace the conventional hydrogen it uses as a raw material in its industrial centers with renewable hydrogen”.

“The goal is to reach an equivalent production of up to 300 MW by 2028”, Repsol said. Toward this, it has greenlighted two electrolyzer projects each with a capacity of 100 megawatts in Bilbao and Cartagena. “In the first half of 2026, approval is expected for a third large electrolyzer, with a capacity of 150 MW, in Tarragona”, Repsol said.

Bigger Investor Returns

As part of the 3-year plan, Repsol said it would allot 30-40 percent of its cash flow from operations – expected to reach EUR 6.5 billion by 2028 – to shareholder returns, including dividends and share repurchases. That allotment amounts to around EUR 3.6 billion, according to the company.

For 2026 Repsol earlier announced nearly EUR 1.9 billion for shareholder remuneration. That includes a dividend per share of EUR 1.051, up 7.8 percent from 2025. Repsol also launched an initial share redemption program of up to EUR 350 million.

“Over the next two years, the commitment is to increase the total amount allocated to cash dividends by 3 percent per year, to EUR 1.233 billion in 2028”, Repsol said. “Alongside the share buyback plan, this will allow the dividend per share to increase by more than 6 percent per year”.

Acknowledging “volatility triggered by the conflict in the Middle East”, Repsol said its new investment plan “underscores the strength of its businesses”.

Chief executive Josu Jon Imaz said, “Repsol has the right strategy to drive continued growth, even in a volatile environment, supported by an integrated model, a balanced mix of conventional and low-emission businesses, and a diversified portfolio of assets”.

To contact the author, email jov.onsat@rigzone.com