And proud too, and proud. Josu Imaz has come to see us and honored us here. Never have international decisions affected the Spanish economy and Spanish companies more, and especially you. To start where we should start, what's happening with Venezuela? What are you going to do? Mr. Trump doesn't want you to export oil from there, and you've made a big bet.
Well, starting with what's important, I'm very happy to be here, Pedro Cruz, friends. I was heading here this morning and I felt like Munibe, Narros, those enlightened Basques from the late 18th century who were concerned about the state of technology in industry and sent young people at the end of the 18th century to study blast furnace technology in Germany. They brought Prussian chemistry to Vergara to teach science and technology. They discovered tungsten in Vergara in those years and they used to come to Madrid to these gatherings of enlightened academics where together they thought and reflected on the future of a modern, competitive, and liberal Spain. And Pedro, you are the catalyst of this movement of enlightened reflection, and for some of us participants who pick up our suitcases and come here, it's a genuine honor to be part of this forum. And some might think this is a strategy to dodge Fernando's question, who was also there.
Let's see. First, we've been in Venezuela for 31, 32 years. 32. We are mainly gas producers. Almost 85% of our production in Venezuela is natural gas, which also supports part of the electrical system of all of western Venezuela. And we've been through the last 10, 15 years, as you can imagine, many vicissitudes. But we've always had one thing clear. We comply with the legislation, of course, the Venezuelan legislation, international legislation. We have been at all times and are throughout all these years very close to the American administration with total transparency and collaboration. And we have always, of course, respected and will respect the entire scope of international legislation regarding international sanctions. And simply to say that we continue with that open and fluid dialogue, and therefore we continue working, we are in direct contact with the American authorities, and we're going to see if we're able to find mechanisms that can allow us to continue our activity in this country, which has never been easy, but logically we also have a responsibility insofar as, as I said before, practically an important part of the electrical system also depends on our production, which is mainly natural gas. In this case, for Repsol in Venezuela, we have a small oil production, but 85% of our production is natural gas. Well, the dialogue is open, we continue talking, and we'll try to find mechanisms that allow our activity, which as I say has always had those ups and downs of recent years and periods of difficulty. We have to remember that this license that's being talked about was approved in May 2024, but in April 2024, a year ago, we didn't have it either. So we'll seek mechanisms to continue with this activity.
But you've always had a good relationship with the United States, and you've also bet on that market with other investments, right? Are you optimistic?
Let's see, I believe that optimism and pessimism are states of opinion. What we have to be is realistic. And I certainly have an Atlantic vision of life, and the Atlantic vision is believing in — I know it's not very fashionable now — but believing in a space of values: democracy, human rights, legal security, and also the balance of powers. And I believe that Europe and North America represent that. And that's what we mean when we talk about Atlantic cooperation. These times have some distortions, it's evident, but we can't forget. The United States, if my memory serves, is possibly the largest investor in Spain today. And for Spanish foreign investment, the United States is the first destination. And therefore, I believe there is a granularity of economic relationships that, also as a European and a proud European, and betting on a European project — as Belén Garejo was also saying this morning — on strategic autonomy and on a shared political project in Europe. But I believe in the transatlantic relationship, and I believe in a moment when it's the most difficult to say it, but I believe we have to continue, and also companies betting on it, because in the end, the relationship between two societies is also made from the granularity of the social fabric and the economic fabric.
Very well. International and national decisions affect Repsol. Didn't you fight a battle against the energy companies' tax? You have things to do here. You've won that battle for now, right?
No, Spanish society won it, and Spanish industry won it, because it wasn't Repsol's battle. It was a battle — as José Manuel Entrecanales was saying a moment ago — where we need legal certainty, we need stability, we need the ability to attract investment, and the Spanish industry in the refining and chemicals sector possibly wouldn't have survived that regulation. And I believe we've all won, and today the entire energy sector is beginning to invest again.
Yes, but we'll talk about that later because there's a question about that too that I want to ask you. But first, tell us about 2025 — how does the oil company see it? You've had results affected by the oil price, gas prices. How do you see 2025, full of uncertainties with all these decisions? All in all, three months have passed and you're still there.
Well, let's see, there are businesses that are, I was going to say, as good and respectable as ours, but they are much more stable businesses, with less volatility, much more subject to regulation, with continuous cash generation. And ours is subject to international markets, lots of volatility, it fundamentally depends on installed capacity and demand, and therefore we are always subject to that variability. For example, in 2024, the factors that affected us the most were weak demand in China, which from the point of view of commodity prices and oil also negatively affected demand. We had the tension in the Middle East, which from the point of view of the supply market creates concern about supply availability, so these are factors that have impacted the price in opposite ways. We've had in the last two or three years the great European crisis due to energy prices, fundamentally with a significant industrial capacity that has been destroyed in Europe during this period. The Draghi report speaks of 12% that we've lost in six years in European energy-consuming industry, and that is significant damage from which we won't recover easily. And then, curiously, we're also living through a moment in Spain where liquid fuels are growing, and we've had January and February, if my memory serves, where we had more liquid fuel consumption in Spain than in 2019 before the pandemic. So I would say the fundamentals of our market are healthy. The world continues to grow in its oil consumption year after year — we haven't reached peak demand. Natural gas, which is also a very important energy from the point of view of the energy transition, continues to rise in demand, and I believe we need to make it possible for supply to exist, because many times from a very ideological view of sustainable finance, they say, let's restrict supply to make it difficult to invest in and produce oil and gas. You don't need a Harvard economics PhD to figure out that if demand keeps growing and we restrict supply for ideological reasons, prices go up, inflation goes up, and fundamentally consumers pay with high energy prices in their homes and industry's competitiveness pays with high energy prices. Therefore, I believe we need more technology and less ideology on this issue.
That's true. But let me go to industry. A 12% loss of industrial capacity in Europe is going to be hard to recover. In Spain, many people haven't started their industry because the whole energy situation was complicated, those prices. There's a reindustrialization underway. Let's look to the future. For now, we continue destroying industry in Europe — there's a vocation and discourse around reindustrialization and European funds that can be used for that, but in Spain we have the weakest government in many years. Nothing can be approved in Congress. We have to govern by decree. How do you fit together reindustrialization and taking advantage of funds with political weakness to make decisions?
