Spain's Repsol YPF is forming a joint venture with the Moscow-based Alliance Oil Company Ltd. to seek growth opportunities in Russia, the Spanish energy company said Saturday.
Repsol said in a statement that Alliance Oil will hold 51 percent in the joint venture and contribute production assets in the Volga-Urals region, while Repsol will own the remaining stake by making a cash investment.
The deal should enable Repsol to increase its production capacity by allowing it "privileged access to assets in the country, home to some of the largest hydrocarbon resources in the world," said Repsol executive chairman, Antonio Brufau.
The joint venture expands Repsol interest in Russia, where already owns a 3.47 percent stake in Alliance Oil after a 2008 merger between Alliance Oil and West Siberian Resources, the statement said.
Repsol said it also holds exploration and production licenses in the West-Siberian basin thanks to a 74.9 percent stake in a company called Eurotek-Yugra.
Repsol's net income rose 11.2 percent to euro765 million ($1.1 billion) in the first quarter.