Post by account_disabled on Mar 7, 2024 3:11:06 GMT
Spanish energy company Repsol SA said it is writing down the value of its assets by billions of dollars because the global transition to a lower-carbon economy is weakening the outlook for oil and gas prices.
Repsol's move is the first by a major oil and gas player to acknowledge that a lower value of its assets was related to a long-term view that a transition to less carbon-intensive energy will see oil and gas natural gas are less valuable.
While the strategy may seem correct, according Chile Mobile Number List to the Bolsamanía site , it has been reported that the company's medium and long-term profitability is doubted due to this move.
Quoting verbatim, they explain:
Berenberg experts have cut their assessment of Repsol due to doubts about the downstream business and medium and long-term profitability. The firm has lowered its advice to 'hold' from 'buy' and its price target to 16 from 17 euros, which still gives it potential from current trading levels of 14.24 euros.
We have downgraded Repsol's rating to 'hold' based on: a) lower downstream prospects, which have not yet been reflected in consensus estimates, and b) uncertainty over its medium- and long-term profitability profile. after Repsol's strategic change towards low carbon businesses.
Berenberg
Repsol's cut is included in a report on Oil and Gas published this Monday by the German firm.
Berenberg adds in his report that the update of the strategy that Repsol will carry out in the first half of 2020 is an "important catalyst." «Repsol plans to carry out an update of its strategy in the first half of 2020 (date to be confirmed), during which it plans to develop the recently announced objectives to achieve net zero emissions in 2050 through a strategic shift towards renewable energy and biofuels, and a focus on gas. Repsol is at the end of its 2018-20 investment plan and we are seeking more specific guidance on what its strategic development focused on renewables will entail to obtain benefits.