Repsol warns that extending the energy levy on utilities could threaten its investments in Spain. The concern centers on regulatory and fiscal stability, with the feeling that ongoing uncertainty may slow down industrial projects. The company’s response followed the PSOE and Sumar pledge to keep the tax after it expires at the end of the year, as outlined in a statement accompanying results released in September.
Repsol states that the tax might be applied to energy firms that fail to generate significant employment or economic activity in Spain. It argues that such a levy would punish companies that invest in assets, support industry, create jobs, and safeguard the nation’s energy independence, while also affecting importers. The tax targets energy companies that do not drive meaningful growth, even as price turmoil rocks the sector. Alongside similar measures for banks, the levy amounted to 1.2% of corporate income for 2022 and 2023, with liquidation in 2023 and 2024, resulting in an impact of €444 million on the accounts of those firms in the first year.
The oil major notes that investments through September reached €4.362 billion, up 82% from the prior year, focusing on two regions: Spain with 41% and the United States with 37%. The company aims to finish the year with total organic investments of €5.2 billion. The United States remains the focal point in CEO Josu Jon Imaz’s frequent remarks, who often highlights three benefits associated with the U.S. inflation reduction framework and investment incentives: stability, simplicity, and investment incentives. These mentions contrast with European regulatory complexity, which the executive has described as a hurdle.
Second best result
All in all, Repsol is enjoying a strong period. After a break that set records last year due to high oil prices, the company has posted notable results through September. Net profit reached €2.785 billion, down 14% from the previous year but still among the highest figures for the first nine months. The company’s operating result, a measure of core business performance, stood at €3.816 billion versus €4.654 billion the year before.
The governance update shows a robust cash generation profile and a continuing emphasis on shareholder returns. Repsol announced a dividend of €0.4 per share in January, benefiting roughly 520,000 shareholders. Major investors include BlackRock with about 5.5% of the capital, Norges Bank around 5%, and Millennium with roughly 1.1%. This marks a year-over-year increase in remuneration for shareholders, including a supplementary dividend paid in January and a higher cash dividend compared with the previous year. Combined with capital reductions, the distribution for 2023 is estimated near €2.4 billion.
The leadership at Repsol, led by Josu Jon Imaz, continues to push forward with transformative projects. Earlier this year, the group opened its first hydrogen project at the Petronor refinery in Vizcaya and has begun startup work at a facility in Cartagena dedicated to renewable fuels. The site will process organic, non-fossil feedstocks and has an annual capacity of 250,000 tons. A second plant near Puertollano is planned to begin operations in 2025 with an anticipated production of 240,000 tons annually. Repsol targets to produce about 1.3 million tons of renewable fuels in 2025 and over 2 million tons by 2030.