Galp Profits Soar, as E&P Achieves Key Milestone
Portugal’s Galp has said its upstream division is producing over 100,000 barrels of oil equivalent per day for the first time in its history.
The “new milestone” has been reached since 3Q2017, for which net Galp working interest production averaged 94,600 boe/d, up 28% year on year, the company said in its results October 30. Of that 82,800 b/d was oil.
Brazil accounted for 86,800 boe/d (up 35%) of Galp output – with the company among top bidders in last week’s upstream auction – whereas Galp’s Angolan net output at 5,600 boe/d was 23% lower year on year. But Galp expects an increase offshore Angola too in 2018, when the block 32 Total-operated Kaomba oil field is scheduled to start up. Galp said its overall production has tripled in three years and is expected to grow further in future, particularly as its share of gas reserves in Mozambique offshore Area 4 gas start to be produced from 2022.
Galp’s 3Q2017 net income on an international (IFRS) accounting basis was €163mn ($189mn), up 80% year on year, with pre-tax earnings (Ebit) on the same basis up 62% at €314mn, of which roughly two-thirds from upstream. It also reduced net debt by 11% over the year to €1.46bn at end-Sept. 2017.
Galp’s total gas/LNG sales value, however, declined by 2% year on year to €1.72bn. Whereas gas sales volumes to direct customers increased by 12% to 1.065bn m3 in 3Q2017, gas/LNG traded volumes were 18% lower at 0.652bn m3 “following lower volumes sold under structured LNG contracts.” Electricity sales volume in 3Q was almost 1.3 terawatt-hours, in line with the previous year.
Whilst almost 60% of Galp shares are free float, the company is 33.34%-owned by Amorim Energia. The latter is majority-owned by Portuguese family-run Americo Amorim Group (controlled by Portugal's richest man Americo Amorim until his death 13 July 2017) with Esperaza Holding (run by Angolan state-owned producer Sonangol) as its minority shareholder.
Mark Smedley