Repsol YPF SA ADRREP

Morningstar Rating

Stock Research and Analysis

by Allen Good

Repsol YPF carries more risk than the typical major integrated company. However, current plans to divest underperforming assets, diversify its production base, and upgrade downstream facilities could improve operations while reducing uncertainty and Read more

Bulls Say

OPEC's ability to influence global oil prices benefit Repsol YPF's significant upstream assets and give the company a narrow economic moat.

Repsol YPF is one of a few international firms with concessions in Brazil's promising pre-salt oil fields.

If Repsol YPF can divest its Argentinean assets, the remaining company will be in a better position to compete with its larger integrated peers.

Repeal of price controls in Argentina would improve Repsol YPF's profitability and open the door for investment to grow production. Read more

Bears Say

Over 90% of Repsol YPF's reserves are found in politically unstable Latin America.

The bulk of Repsol YPF's production is subject to price controls that limits profitability.

Repsol YPF generated little interest when it tried before to divest its Argentinean assets.

Production from mature fields in Argentina is declining sharply. Price controls make investment to boost production uneconomical. Read more

Strategy

Repsol plans a strategic shift to diversify its operations away from Argentina through partial divestment of its YPF segment. Investment in upstream operations will focus in North Africa and deep-water Read more

Management

Antonio Brufau Niubo is chairman and CEO of Repsol, a position he has held since 2004. Previously he served as chairman of Gas Natural Group while also serving as a board member of Repsol YPF. Management compensation is line with other large integrated Read more

Profile

Repsol YPF is Spanish integrated oil and gas firm formed in 1999 when Repsol acquired YPF, Argentina's former state-run energy monopoly. In 2008, production was 951,000 Read more

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