Galp Sees Income Shrink on Weak Refining

Portuguese oil and gas firm Galp posted a sharp decline in third-quarter income, as weaker refining margins more than offset the impact of higher output.

Net profit in the three months ending September 30 came to €131mn ($146mn), down from €212mn in the same period a year earlier, Galp reported on October 22. Ebitda slumped 14% to €541mn, on the back of a 6% drop in turnover to €4.284bn.

Galp’s refining segment was stung by maintenance and other operational disruptions, causing its ebitda to sink by 47% to €104mn. But this was partly mitigated by an 18% increase in upstream ebitda to €469mn.

Oil and gas production grew by 21% y/y to 125,500 barrels of oil equivalent/day, thanks chiefly to gains in Angola and Brazil, and this more than countered the effect of weaker prices.

Moving forward, Galp said it would scale up annual investments to €1.0-1.2bn until 2022, compared with up to €1bn under a previous plan, in order to build up its gas and renewables operations.

“We are preparing Galp for a new growth cycle in which we will contribute very actively to the energy transition,” CEO Carlos Gomes da Silva said.

The focus upstream will remain on developing world-class projects, the company said, noting it currently boasted a breakeven price of around $25/barrel.