Spanish energy company Repsol is said to be in talks to sell a part of its oil and gas unit to US' private equity group EIG Global Energy Partners.
In a deal that would give the Spanish group cash for its plans to build clean energy capacity such as solar and wind farms, the US fund is keen to buy up to 25% of Repsol's upstream business, Reuters reports.
The companies began negotiating after EIG made an unsolicited offer and though a deal value could not be ascertained, analysts said the upstream business is worth between €14-18bn (US$15-19bn), including debt.
Increasing oil and gas prices as a result of Russia's invasion of Ukraine have boosted producers' returns with Repsol shares up 48% this year, trading at levels last seen in the summer of 2011.
Through the deal, Repsol will be able to achieve its goal of doubling its low-carbon power generation capacity to 7.5 gigawatts (GW) by 2025. A gigawatt is roughly equal to the output of a nuclear plant.
Repsol produces oil and gas mainly in North and South America and Libya, with gas making up 70% of its proven reserves, whereas oil makes up only 20%.
The company expects to produce 585,000 barrels of oil equivalent each day in 2022.
EIG, which specialises in investments in energy infrastructure and related areas, led a consortium last year that spent US$12.4bn on a 49% stake in pipelines owned by Saudi Aramco.
Repsol sold its interests in exploration businesses in various countries, as well as its remaining Russian assets to Gazprom Neft in January.