In 2010 Repsol increased its commitment to Brazil by signing an agreement with the Chinese company Sinopec for the joint development of hydrocarbon exploration and production projects, establishing one of the biggest private energy companies in Latin America with a value of $ 17.777 billion. Repsol Brasil approved a capital increase at the end of the year, following which Repsol now owns 60% of the capital and Sinopec the remaining 40%.
This agreement represents a confirmation the success of the exploration activities carried out by Repsol in Brazil in recent years and a recognition that the strategy and investment in this area were correct, in terms of human, technical and material resources, especially in Brazil's offshore pre-salt area.
The funds provided for this operation cover the total financing needs of investments that envisage the total development Repsol Brasil's asset portfolio, which includes some of the most important discoveries made in the world in recent years.
In 2010, the company was involved in six new discoveries, which represents a continuation of its successful exploratory results in 2008 and 2009. The finds took place in Venezuela (at the Perla 2x well), Brazil (Creal B and Piracuc´-2), Sierra Leone (Mercury-1) and Colombia (Calamaro-1). Additionally, as part of its work developing the Río Grande area in Bolivia, Repsol made a gas discovery at the RGD 22 well. In January 2011, Repsol Sinopec and its partners, the Brazilian company Petrobras and the British BG Group, discovered good-quality oil in ultra-deep waters in the Santos basin, in the Brazilian pre-salt. This find was made at the Carioca Nordeste well, situated in the BM-S-9 block, 275 kilometres off the coast of São Paulo.
Since 2008, Repsol has made 34 discoveries in important areas such as Brazil, the United States, Algeria and Peru, some of them considered the biggest in the world in recent years. These finds have allowed strategic development projects to be brought to fruition, guaranteeing the organic growth of the company in the future.
On 10 June, the Chairman and Chief Executive Officer of Repsol, Antonio Brufau, and the President of Peru, Alan García, inaugurated the first gas liquefaction plant in South America at Pampa Melchorita, 170 kilometres south of Lima. This installation, which forms part of the Peru LNG project, involved an investment of $ 3.8 billion, the largest in the history of Peru in a single project. The plant, with a nominal capacity of 4.4 million tonnes/year, will process 17 million m3/day of gas, equivalent to approximately 15% of the annual consumption of Spain. It has the two largest storage tanks in Peru (with a capacity of 130,000 m3 each) and a marine terminal over a kilometre in length which will receive ships with capacities between 90,000 and 173,000 m3.
On the 28 April the Repsol Board of Directors approved the new projects and investments that determine the strategy of the company in Horizon 2014. The unprecedented exploratory successes achieved by Repsol in recent years and the changes brought about by the world economic crisis have shaped a new framework for the company strategy, which maintains its main action lines, defined by rigorous financial discipline and the creation of value for shareholders.
In this new scenario, exploration and production activities will be the engine that drives the growth of the company, with the development of the great potential of its recent discoveries. Repsol's presence in many geographical areas with the world's highest exploratory potential and its recognised ability in deepwater exploration have transformed the company into one of the energy companies with the best growth prospects.
In 2010, Repsol moved forward with its strategy of divestment of non-strategic assets, as envisaged in Horizon 2014:
• The sale of 5% of the Compañía Logística de Hidrocarburos (CLH) to BBK for €145 million. This share was indirectly controlled through Petronor.
• The sale of 82% of the Gaviota natural-gas underground storage facility was agreed with Enagás for €87 million.
• Divested its 25% holding in Bahía Bizkaia Gas, S.L (BBG) for €31 million.
• Sold its 30% holding in the Alberto Pasqualini Refinery (Refap) in Brazil, to Petrobras.
In April 2010, Repsol created the New Energy Business Unit to promote and provide business sense to new initiatives contributing to a vision of a more diversified and less CO2-intensive energy future. It will be responsible for identifying opportunities, promoting projects and implementing business initiatives in fields such as bioenergy and renewable energy applied to transport.
This unit also will develop new businesses relating to CO2 emissions reduction and carbon pricing, in particular carbon capture and storage.
With the aim of boosting new energy, Repsol promoted the following agreements during 2010:
• Acquired 20% of AlgaEnergy, a leading company in microalgae research.
• Signed the purchasing agreement for 47% of Orisol, an international company promoting renewable energy projects.
• Set up a company, together with the Basque Energy Board (EVE), to construct and operate a recharging network for electric vehicles in the Basque Country.
• Created a joint company, named KUOSOL, with the Mexican group KUO, dedicated to the development of bioenergy from the cultivation of Jatropha curcas, an oil-bearing plant with a high content of non-edible oil.
For yet another year, Repsol was recognised through different international awards and inclusion in the main reference indexes.
It received the standard of Gold Class company, according to the Sustainability Yearbook 2010. This publication includes the world's best-performing companies in the fields of sustainability and corporate responsibility.
It received the Emissions Tracking Carbon Verification Leaders Award 2010, acknowledging the information disclosed by the company regarding the verification and accounting of its greenhouse gas emissions.
For the fifth consecutive year, Repsol is listed in the prestigious Dow Jones Sustainability Index World (DJSI World) and Dow Jones Sustainability Index Europe (DJSI Europe). Repsol is one of 12 oil companies and one of 17 Spanish companies to be included in these selective indexes.
The Canada-Spain Chamber of Commerce awarded Repsol the prize of Company of the Year in Canada in recognition of its commitment to the country over the last few years.
Once again, the company has been included in the Climate Disclosure Leadership Index (CDLI), which groups the 51 best industrial companies in the world featured in the FTSE Global Equity Index Series (Global 500) regarding climate-change communication and transparency.
In January 2011, the Telefónica Ability Award for the Best Private Company recognised the sustainable business model and the integration of disability into the Repsol value chain.