Repsol may cut 2009 dividend by 19 pct-paper

MADRID, Nov 7 (Reuters) - Spain's Repsol (REP.MC) may cut the dividend to be paid against its 2009 results by 19 percent from a year ago amid an expected sharp drop in earnings, El Economista newspaper said on Saturday, without citing a source.

The possibility of trimming the dividend to 0.85 euros from 1.05 euros was raised informally by the oil and gas group's chairman Antoni Brufau at its last board meeting on Oct. 28, the paper said.

No-one at Repsol was immediately available to comment.

Repsol has an ambitious investment programme of 27 billion euros until 2012, including 4.4 billion this year, but recent strikes in Brazil and Africa will also require cash if they are to be developed and boost the company's declining reserves.

Analysts flagged, however, that Repsol's practice of financing investments purely with cash flow is partly doomed by a dividend which eats about half of the company's profits.

Core earnings fell by 2 billion euros to 2.98 billion in the first half of 2009 and are seen by analysts to hit 6 billion for the whole year, down a third from 2008. Repsol's dividend payout stands at about 50 percent of net profits.

The proposed dividend cut was supported by two of Repsol's core institutional shareholders. Mexico's state oil company Pemex PEMX.UL and Criteria (CRIT.MC), the investment vehicle of Spain's largest savings bank La Caixa, El Economista said.

Spanish builder Sacyr Vallehermso'S SYV.MC chairman Luis del Rivero argued, however, the company should at least maintain the dividend.

Sacyr is Repsol's biggest shareholder with 20 percent and the builder needs the dividends to help pay its hefty debts. (Reporting by Judy MacInnes; editing by Chris Pizzey)