Fossil Fuel

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What's going on?

Spanish oil company Repsol unveiled a new five-year strategic plan on Thursday. Step one: make oil a thing of the past…

What does this mean?

After a brutal year for oil companies the world over, Repsol is doubling down on its transition away from the slippery elixir: itll spend around $6.5 billion growing its renewable energy business fivefold by 2025 (tweet this). At the same time, the companys planning to cut spending on exploration and production by 15%, and instead focus its efforts on a few countries where production offers more value for money. Itll then funnel whatever it earns straight back into segments like wind and solar with the aim of making its renewable business a more, ahem, sustainable one in the long term.

Why should I care?

For you personally: Hipster oil.

Repsol was into renewables before other oil companies thought they were cool: the company pledged last year to cut or offset its emissions, and said last month its already spending more on renewable energy than on oil-drilling. That early move has had ripple effects across the industry, with bigger European rivals including Total, Shell, and BP all following if not one-upping its example. And if that pioneering mindset is the kind you want to invest in, you might be able to very soon: Repsols thinking about listing its low-carbon business on the stock market in the next two years.

For markets: Holy fail.

Repsol also announced itd be reducing its dividend from 1 a share to 60 euro cents next year, but said it expects payouts to start growing again from 2023. Still, that might not go down well with its investors, who see dividends steady income as something of a holy grail. BP and Shells decision to do the same thing earlier in the year certainly didnt: investors made their stock prices pay dearly for the move.

Originally posted as part of the Finimize daily email.

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