Portugal’s Galp ups investment plan, seeks more renewable energy, natgas

The oil company’s chief executive, Carlos Nuno Gomes da Silva, said on Tuesday it would invest 10-15% of the total in new renewable energy, most of it to harness solar power, although not ruling out wind power and other technologies.

Lisbon : Portugal’s Galp Energia earmarked between 1 billion euros ($1.11 billion) and 1.2 billion euros in annual investment until 2022 in an increase from up to 1 billion under a previous plan, seeking to expand its natural gas and renewable energy business.

The oil company’s chief executive, Carlos Nuno Gomes da Silva, said on Tuesday it would invest 10-15% of the total in new renewable energy, most of it to harness solar power, although not ruling out wind power and other technologies.

“But clearly, our primary focus will be solar photovoltaic, where we are already developing a set of internal projects that will play an important role in hedging and complementing our power business … And we are speaking about greenfield projects, mainly,” he told a conference call.

The company said over 40% of its long-term investment was aimed at a transition to greener energy, namely projects involving the production of natural gas, which burns cleaner than oil, as well as renewable energy.

Galp expects its large gas production and liquefaction project in Mozambique and the Carcara project in Brazil to consume most of that investment.

“Carcara is the new kid in town that will have us involved and actively work on for the next few years,” the CEO said.

Galp said if acquisition opportunities arise that would make it exceed the 1.2 billion euro investment limit, it could divest its stakes in some projects to raise capital.

Galp’s investment in oil and gas exploration and production will remain focused on developing its various world-class projects, such as the sub-salt areas off Brazil’s coast.

Galp, which is mainly an oil refiner, has stakes in various large oil fields off Brazil’s coast and has been building up its oil and gas production, which now reaches nearly 140,000 barrels a day.

It also posted a sharp drop in its third-quarter net profit to 131 million euros from 212 million a year earlier due to a decline in refining margins even as its oil output rose over 20%. It expected fourth-quarter production to keep rising as various platforms are ramping up output.

Source : reuters