Spain’s Repsol pulls out of planned joint venture in Russia’s Arctic

Repsol was to partner with Gazprom Neft and Royal Dutch Shell on two blocks in the Gydan Peninsula.

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The logo of Spanish energy giant Repsol SA is seen during the opening ceremony of its first gas station in Mexico City, Mexico March 12, 2018. (Carlos Jasso / Reuters)

MOSCOW — Spain’s Repsol has pulled out of a planned joint venture to develop two Arctic oil blocks with Russia’s Gazprom Neft and Royal Dutch Shell, a spokesman at Repsol said last week.

Gazprom Neft, the oil arm of Russian gas giant Gazprom, Repsol and Shell signed a memorandum of understanding last June on establishing a joint venture to develop the Leskinsky and Pukhutsyayakhsky blocks on the Gydan Peninsula in northern Siberia.

A deal on the venture, in which Gazprom Neft would hold a 50 percent stake and Repsol and Shell each own 25 percent, was expected to close this year.

“It’s an option we had on a well we are choosing not to exercise,” Repsol’s spokesman said.

A source at Gazprom Neft said the Russian company will continue to cooperate with Shell on the assets.

“Repsol has informed Gazprom Neft that at the moment, it does not consider a possibility of participation in the project,” the source said.

Gazprom Neft declined to comment.

Reporting by Vladimir Soldatkin and Isla Binnie.