Leadership spotlight with Repsol CEO, Josu Jon Imaz,

Thank you and thank you for having me here. It's a real honor for me.

So first of all, let me say that volatility is part of this business. We don't invest for one year. We invest for 10, 20, 25 years. So we know that in the midst we are going to suffer this kind of ups and downs. That is part of our business. And for us, being in the states is a good decision. We are happy being here. We have invested almost 20 billion dollars over the last 20 years in the states; that for the dimension of our company is a huge amount of money. This year we are going to invest $2 billion in the US. And let me say we feel at home here in the US, not only because the business friendly environment because, and that is important to underline in these complex days, because we are part of the same community of values. We share the value of human rights, respect of democracy, balance of power, market friendly areas. Atlanticism and the concept of Atlantic Council for me represents all these kind of values. And on top of that, being here in the states is a good decision because you have a friendly country to invest here. Friendly because it's a large market, 330 million people is the largest global economy. On top of that, you have a market friendly orientation in all your policies, and that is very important for a company investing in the long term. The respect of rule of law, and being in the energy sector, you have a very important thing: you have an energy ambition to produce more energy, either molecules or electrons in the country. And you have a deregulation agenda and you respect the principle of technological neutrality with no biases. We need more energy. We need an energy transition, of course, but we need an energy transition based on technology and not based on ideology. And sometimes, I'm sad saying that in Europe we forgot the principle of the energy trilemma. We forgot the security of supply concept. And we built dependence on Russia and we risk to build dependence on China now regarding electric vehicle and some forms of mobility. We forgot the concept of affordability and we suffer in 2022, 2023, and European families suffer to pay the energy bills and our industry is suffering the energy cost. And I think that all that is important and has to be respected. My hope is that after the release of a Draghi report last summer, I think that is a clear claim that we have to take action and we need a radical change in European energy policies. Now we need leadership and we need speed. So the Draghi report obviously being the one on competitiveness and how Europe can respond.

I mean, we are an integrated company. That means that we have our downstreaming business and we are a Spanish company, Iberian company, proud of being Spanish. And part of our activities is there. I mean, 60% of our capital employed is in Spain and Portugal, our refineries, our service stations, our retail power business and so on. And at 35%, that could be something close to a current 90% of the total investment is here in the US. So from the point of view of the EMP we are an American. And what we need in Europe to be more attractive because we are also a very large market when we take into account the European Union and the European common market, including the UK, Iceland, Norway, and so on. We are more than 500 million people, so we are a very large market. But we need mainly three things that are clearly described in the Draghi report. First, we need less regulation. We have too many directives, bills, laws, regulation and so on. And for the 60% of the European companies being over regulated is the main obstacle to invest in Europe. So I think that there is a clear message there. On top of that, you have the advantage of being a single market. We aim to be a single market, but we still have a lot of internal barriers in Europe and we have to overcome and erase these barriers. And there is another aspect that is very important in the report related to our sector: we have to respect the principle of technological neutrality. I mean, I always underline a point: you Americans saved Europe many times in the 20th century and sometimes with the blood and the life of your people to defend the freedom of Europeans. I can't forget that. But you also saved Europe in 2022. The American fracking saved the European energy system in 2022 and 2023. And it's a contradiction because in many European countries, fracking, including mine, is forbidden. Exploring and producing natural gas is forbidden in many European countries, including mine. And at the same time, we say to our friends, please, I need your gas. It's great. We love American gas. So we have contracts from the Gulf of America to supply our Spanish system. But I think that we need to be more coherent to boost and to enhance and to increase the investment in Europe.

I mean, security is crucial. And more, as you mentioned in that context where we need more energy. Today we are 8.2 billion people in the world. We are going to be probably by 2040, 2050, more than 9.5 billion people. So more people, more prosperity. I can't forget that roughly speaking, 90% of current humans don't know the experience of flying in a plane. So I want for this 90% of humans the same prosperity you, myself and my family have. That means more energy. On top of that, in this fantastic forum of Atlantic Council, we have listened over these two days the need of AI, the increasing power to feed this artificial intelligence. In the states you are going to need year after year a 3% more of power to feed all these systems. So we need security, reliability that is crucial. So in this sense, I think that again this concept of a more integration and more linkage between the European and the states in energy terms is very positive because promoting and boosting the Atlantic Energy concept is very positive in terms of security of supply because you are in some way a safe harbor, a safe supply country. Today, increasing the connection between the Gulf of America and Europe in terms of natural gas is a positive way to cope with the problem of having a reliable partner for the future. This morning I listened on this stage that some people saying that perhaps we have to think about having a reliable partner for coming 20 years because we had this experience with the Russians. And I face, I can't compare the Russians with the Americans. The Americans, you saved Europe, as I mentioned before, twice over the last 100 years. We share the same kind of values. I think that we have to boost this reliable relationship between the European Union and the states to guarantee the energy needs of Europe. On top of that, we have our own duties also at home. We have to explore our own resources. That is going to arrive. It's not easy. Everybody say, OK, because in Europe we don't explore natural gas because we lack of resources. That's not true.

I mean, I think that permitting is a problem anywhere. It's a problem in the US. It's a problem in the European Union. And I think that we have to put all the political tools on the table to accelerate the permitting of energy infrastructures. Because we had the governor of Alaska some minutes ago here, telling us about the experience of the TAP that was developed in 2.5 years some decades ago. Today, either in Europe or in the states, that would be impossible. We have to redress this kind of obstacles. We have groups of interests that in a legitimate way defend their positions, but they can't be always the obstacles to the development of the infrastructures we need because prosperity of people is behind this infrastructure. So I think that in a bipartisan way everywhere, I'm not talking about American politics, I say that for my own country, for Europe, and of course for the states. We need to put permitting at the very top of the agenda.

I mean, again, let me underline that I'm Spanish and European, very proud of being European. But again, talking about financing, we have a problem. We define in Europe a concept that is called taxonomy. That is putting obstacles to finance natural gas. It is almost impossible to be financed in Europe because every European bank or institution that is ready to finance a gas project has some kind of punishment in terms of the use of capital coming from the European Central Bank for this concept that was defined as green taxonomy. So the same energy that we are using and we used to save Europe in the energy crisis is punished by the European financial system to be used. And I don't accept that we do that on behalf of the concept of decarbonization, that is not true. Because if we analyze what has happened in the world in 2022 and 2023, the main responsible for the increase of CO2 emissions were European policies because we lacked and we forgot the concept of producing natural gas. And after the Russian disruption, we have to acquire, we have to buy LNG all around the world, increasing the price of LNG and making it impossible for many countries from the global south to use LNG and forcing them to shift from gas to coal. So we have to break this, let me say, massive concept of a green taxonomy in Europe because otherwise we are going to have obstacles to develop the energies we need. And again, I'm not suspicious of not believing in decarbonization. I mean, at 35% of the capex of our own company is devoted to low carbon technologies. That is a quite unique case in the oil and gas sector in the world. So I believe in all the molecules, including oil and gas, and in all kinds of electrons, nuclear, natural gas, and renewables. We are going to need all that to fulfill the needs of prosperity of the world.

So first, I'm happy being in Alaska. We bet in favor of Alaska 15, 13 years ago as a result, discovering a significant amount of oil in the north slope in a time where everybody was investing in the lower 48. And at the end of this year with our partner Santos, we are going to start producing the first oil of a product that is going to change the history of energy in Alaska. We are going to increase almost in a 20% the total Alaska's oil production. So it's really, I'm happy, I'm proud of being part of this history of transformation, turning point of Alaska. And I think that we have to think, and the governor of Alaska explained that in a better way than I could, that this contribution of Alaska in terms of oil, in terms of gas, is in some way going to help also American allies in the Pacific Rim. And having more natural gas in the world is also going to contribute to shift from coal to gas in many countries of the global south. And again, we have to work in favor of the trilemma and guaranteeing the security of supply. Producing more resources is also a way to have cheap energy and to decarbonize the world in a quick way, but at the same time preserving the prosperity and well-being of people. And I think that we have to be convinced without any kind of ideological bias in any direction either in Washington or in Brussels.