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Repsol CEO Josu Jon Imaz. Image courtesy of Repsol/Flickr.

Repsol warned on Thursday that it will take $3.2 billion in impairments for 2015, although net income is expected to beat the company’s initial forecast.

The Spain-based company said its board of directors agreed to apply “extraordinary impairments” totaling 2.9 billion euros, or about $3.2 billion, to its 2015 earnings due to low oil and gas prices.

The impairments will result in net loss of about $1.31 billion, or 1.2 billion euros, for the period.

“These provisions can be reversed in future accounts when the price outlook changes,” Repsol said.

Repsol said it will book a full year adjusted net income of $2.02 billion for 2015, an 8 percent jump from 2014 that beats the company’s previous forecast of between $1.75 billion and $1.96 billion.

The company said it will book an adjusted net income of $491 million for the fourth quarter of 2015, an over 20 percent increase from the fourth quarter of 2014.

“The business units have been operated in a context of significant and continuous crude oil and gas price decreases, and Repsol has expanded its application of plans to generate synergies, improve efficiency, divest non-strategic assets and reduce investments,” the company said.

The company’s upstream unit is expected to post a loss of $294 million while the downstream unit anticipates earnings of $534 million.

“The Downstream business unit has compensated the negative effects of lower crude oil and gas prices on the Upstream unit and has increased sales, as well as posting improved performances from the Refining, Chemicals and Trading units,” Repsol said.

The company’s refining margin indicator for 2015 was about $8.5 per barrel, a historical high and $4.4 per barrel more than in 2014.

Repsol said that, in light of continued oil price volatility, it will expand and accelerate its divestment of non-strategic assets and reduce its total 2016 investments by 20 percent to about $4.37 billion, or 4 billion euros.

The company added that it will also accelerate and increase the implementation of synergies tied to its acquisition of Talisman Energy.

Repsol said it has identified about $400 million per year of synergies and added that it has already implemented about 50 percent of the identified synergies.

Repsol produced 697,000 barrels of oil equivalent per day in the fourth quarter of 2015, up from 371,000 boepd in the fourth quarter of 2014, and 559,000 boepd for the full year of 2015, up from 355,000 boped the previous year.