By Chris King •
Published: 26 Oct 2023 • 23:14
Image of a Repsol sign on a petrol station.
Credit: Raúl Ortiz de Lejarazu Machin/Creative Commons Attribution 2.0
THE energy giant Repsol has threatened to halt its investment in Spain and explore ‘other alternatives’, such as Portugal.
Speaking during a conference with analysts to present the results corresponding to the third quarter of the year, Josu Jon Imaz, the company’s CEO, voiced a warning.
Imaz suggested that: ‘before making any investment decision in Spain’, Repsol would analyze whether the conditions were ‘stable and attractive enough to guarantee the profitability of the projects’. If this was not the case he added, than there were ‘other alternatives’ available.
He was referring to the agreement reached by the political parties PSOE and Sumar for a possible coalition government by which it was planned to maintain a special tax for energy companies and banking in Spain.
This agreement, which is currently in force from this year and 2024, does not represent, as of today, ‘any type of law or project to follow’, claimed Imaz. Repsol is the company in the sector most affected by the current extraordinary tax he explained.
Levied at 1.2 per cent of the turnover obtained by companies with revenues of more than €1 billion – excluding regulated businesses and activities outside Spain and outside the Spanish mainland – his company this year paid some €450 million, which Imaz insisted was: ‘illegal, unconstitutional and discriminatory’.
‘It is negatively impacting and punishing energy companies that invest in industrial assets and create industrial jobs in the country’, Imaz continued.
An extension of this tax: ‘will penalise this company even more, with a clear impact on its investors and their ability to invest in the energy transition’, the CEO stressed.
As an example, he pointed to the group’s Chemicals unit in Spain. It is paying this tax on extraordinary profits based on the turnover figure he said, insisting that: ‘at a nett level it is incurring losses and has difficulties competing in the international market’.
For this reason, he indicated that Repsol foresees ‘large investments’ in the transformation of its industrial complexes in Spain.
He suggested however that: ‘the lack of stability in the regulatory and fiscal framework could condition future investments in industrial projects in the country’.
Imaz pointed out that Spain was ‘the main geography’ where the group is investing and where it plans to continue developing this ‘major investment’ in its industrial assets.
However, he insisted that for this to continue to be the case it was necessary: ‘to have a clear, predictable, and stable regulatory and fiscal framework’.
There are ‘other alternatives’ such as Portugal suggested Imaz, where Repsol could have international activity in its industrial business.
‘But again, we are going to carefully analyse the regulatory and fiscal framework before making new investment decisions in the Spanish geography. Because we have to protect, above all, our shareholders, and our employees’, he highlighted.
For the oil company executive, this special tax was: ‘favouring people who come to the Spanish market, not creating a single industrial job in Spain. That is punishing the companies in which we are investing in Spain. We are creating industry in Spain’, Imaz explained.
Furthermore, he stated that Repsol will fight this tax in both Spanish and European courts. Imaz pointed out that there was a ‘quite important difference’ between what the European Council defined as a tax – being temporary to respond to the special market conditions and based on profits – and not on turnover as in Spain.
As a result, the company has already filed a contentious-administrative appeal against the special tax in the National Court and also went to the European courts, because Repsol considered: ‘that it is also unfair at the European level’.
He warned that in the event that the company’s appeal is overturned in the National Court, Repsol will go to the Constitutional Court , since it believes that the tax ‘is unconstitutional and is also breaking European competition’.
‘I am convinced that we are going to win at the end of the road because something that is unfair, illegal, discriminatory and is impacting in negative terms cannot be approved in any case , and we have to try to solve the problem. Of course in legal terms we trust in our judicial system and also in the constitutional framework’, he stated, as reported by larazon.es.
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Originally from Wales, Chris spent years on the Costa del Sol before moving to the Algarve where he is a web reporter for The Euro Weekly News covering international and Spanish national news.
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