Image: Repsol to fully own the joint venture with Sinopec. Credit: James Jones Jr/Shutterstock.com.

Spanish oil and gas company Repsol has reached an agreement with Chinese company Sinopec to acquire its 49% stake in Repsol Sinopec Resources UK (RSRUK), a North Sea oil and gas exploration joint venture (JV) in the UK.

Expected to complete by the end of this year, the deal involves a net cash outlay of $1.1bn. It is subject to the fulfilment of certain conditions.

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Respol said that the deal will not have any ‘significant’ impact on its earnings as it had already made a provision for the arbitration.

Once completed, Repsol will have sole ownership of RSRUK.

The deal also settles a long-running dispute between the two companies, which has been ongoing since 2015.

Sinopec and its Addax Petroleum UK unit had been calling for $5.5bn in compensation for their initial expenditures and lost opportunities from their 2012 JV with Canadian oil company Talisman Energy.

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In 2014, Repsol bought Talisman, with the JV subsequently renamed as Repsol Sinopec Resources UK in July 2016.

With the spat now resolved, the two companies aim to continue their partnership that covers their Brazil JV as well.

Last December, Repsol secured a €120m ($126.9m) loan from the European Investment Bank (EIB), to construct and operate a biofuels production plant at its Cartagena facility in Colombia.

Construction on the plant began in last March and is anticipated to complete in the second half of this year.

The plant is expected to produce biofuel from different types of waste from agri-food industry including used cooking oils, as part its efforts towards a circular economy.