Repsol and Alliance Oil have agreed a Memorandum of Understanding for the creation of a joint venture to carry out upstream activity in Russia. Repsol will have a 49% stake and Alliance 51%.
The joint venture will have an initial value of approximately $800 million. Alliance will contribute assets worth $600 million. Repsol will invest $200 million in a capital increase and will acquire shares for a further $200 million, taking total investment to $400 million.
The transaction is subject to final negotiations on contractual terms, due diligence on the assets to be contributed by Alliance Oil and on securing the corresponding regulatory and corporate approvals. It is hoped these can be obtained before the end of 2011.
