Spanish oil giant Repsol, which is selling assets following the expropriation of its Argentine YPF subsidiary last year, on Thursday said its 2012 net profit fell 6.1 percent to 2.06 billion euros ($2.7 billion) despite a rise in production.
The Madrid-based company blamed a decline in the value of its oil inventories, which it stocks as part of Spain's oil reserve, to 5.5 billion euros from 7.3 billion euros in 2011 for the drop.
If the change in the value of the inventories was excluded, the company said its net profit in 2012 would be 2.05 billion euros, a 5.4 percent increase over the previous year.
The company's total oil and gas production rose 11.3 per cent to 332,000 barrels of oil equivalent per day with significant increases recorded in Bolivia, Libya, the United States, Spain and Russia.
Repsol unveiled a new strategic plan in May after Argentina nationalised oil and gas producer YPF, in which it had a 51 percent stake, that focuses on boosting oil exploration and reducing its net debt to avoid a possible downgrade by credit rating agencies.
As part of the strategy the company said it would invest 19.1 billion euros between 2012 and 2016 to develop new exploration projects, mostly in Algeria, Brazil, Bolivia, Russia, the United States, Spain, Peru and Venezuela.
Repsol was left with 6.4 percent of YPF, Argentina's leading oil and gas company, following the nationalisation.
The company announced Wednesday that it had sold liquefied natural gas (LNG) assets in Trinidad and Tobago, Peru and Spain to Shell for $6.65 billion (5.1 billion euros) in cash and debt.
Repsol said the transaction, which it expects to close before the end of the year, will mean that it surpasses the 4.5 billion euros in divestments outlined in the 2012-2016 strategic plan.