Repsol says Gas Natural stake cut an option

MADRID, July 30 (Reuters) - Spanish oil major Repsol (REP.MC) does not rule out reducing its about 30 percent stake in its Gas Natural (GAS.MC) affiliate if it needs to raise cash fast, Chief Operating Officer Miguel Martinez said on Thursday.

Repsol's upstream offshore Brazilian assets would take priority over its stake in Gas Natural if the oil company urgently needed to boost liquidity, Martinez said to analysts on a conference call after the group's first half results.

Repsol reported a 62 percent fall in first half adjusted net profit from a year earlier on Tuesday [ID:nLU378199], with net debt doubling in the second quarter from the first due to the consolidation of debt-laden utility Gas Natural.

"Brazil is something we have worked very hard on, it is the future of the company, Gas Natural is optional," the COO said when asked whether the company would sell Brazilian assets, reduce its Gas Natural stake, cut its dividend, or sell part of its Argentine YPF unit.

Repsol wants to cut its stake in YPF to reduce exposure to Argentina but not to defend its dividend or balance sheet, the COO said, adding that Repsol is still targeting 50 percent payout but will not take a decision on dividends until end-2009.

PRODUCTION BOOST IN AUGUST

Repsol said the Shenzi field it has a stake in in the Gulf of Mexico, Repsol's other focus for oil production after Brazil, will reach peak production in August, Martinez said.

Shenzi is expected to produce 140,000 barrels per day, 39,200 of which will correspond to Repsol's stake in the prospect, boosting the Spanish oil major's oil production by 4 percent.

(Reporting by Jonathan Gleave; Editing by David Cowell)