Galp To Invest €1bn in 2018, Eyes LNG
Portugal's Galp is looking to invest around €1bn this year, chiefly upstream, with Brazilian oil and Mozambican gas projects expected to be main beneficiaries.
It said February 20 it expects to invest between €1bn and €1.1bn this year in various projects, but including a focus on Mozambique Area 4 where it is a partner in the ongoing Eni-led Coral FLNG development and planned Exxon-led Mamba onshore LNG project. Capex will target projects with high added value, said Galp, with its E&P segment expected to absorb around 70% of total investment out to 2020.
Oil and gas projects in Brazil, where the company expects to reach a compound annual growth rate between 15% and 20% this year, will continue to be the main growth driver, receiving 35% of total investment. Currently, seven floating production ships (FPSOs) are operating offshore Brazil, in which Galp is an equity partner, with two more are planned to begin operation in the next two years.
Another E&P investment is Mozambique, where Galp holds a 10% stake in the Coral FLNG project and sees it as a strategic pillar for the coming decade; it is the first FLNG project in East Africa and make Mozambique a major natural gas producer from 2022.
For 2018, Galp expects pre-tax earnings (Ebitda) of €1.8bn-€1.9bn, assuming a Brent oil price of $60/b, while it’s also looking to increase its production by 50% until 2020. It currently produces just over 100,000 barrels of oil equivalent/d.
Beyond 2020, Galp expects to develop various projects already identified in Brazil and Mozambique which will "ensure its sustainable growth over the next decade”.
Galp also posted its 4Q 2017 results February 20 reporting growth in most segments. Ebitda for E&P was €306mn, up by €74mn compared to the same period in 2016, supported by production growth and higher oil and natural gas prices. The progressive development of the Lula and Iracema oil projects, offshore Brazil, helped the average working interest production reaching 101,200 boe/d, up 19% year-on-year.