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.

By Reuters - May 28, 2020
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.