Portugal's Galp gets Brazil, Angola boost

Barcelona — Portugal's Galp has reported a 21% rise in its upstream oil and gas production in the fourth quarter, to 135,00 b/d of oil equivalent, thanks to output increases in two key locations: Angola and Brazil.

Portugal's largest oil and gas company, which emerged out of a restructuring of Portugal's energy sector in 1999, increased its Brazilian output by 18% in the fourth quarter compared with a year earlier, to 121,800 boe/d. This was thanks to rising throughput at the Lula North Floating Production Storage and Offloading vessel and the hookup of a fourth well in the quarter, as well as the startup of a production unit at the separate Berbigao-Sururu subsalt area in November, it said in an operational statement.

Galp holds stakes of between 9% and 10% in the Lula area and 10% in Berbigao-Sururu.

With most of its production coming from Brazil, the company believes it can break even at $25 oil prices, it said in November.

The company's Angolan production also got a boost from its 5% stake in block 32, where output from Total's Kaombo field has been ramping up since the start of production in 2018, helping stem the decline in Angolan output seen in recent years.

Galp's Angolan production was up 50% on the year, on a net basis, at 13,300 boe/d.

Angola and Brazil are Galp's main sources of production, although it has high hopes for LNG production in another Portuguese-speaking country, Mozambique. The Coral South LNG project offshore Mozambique, featuring an offshore floating liquefaction facility, is due to be commissioned in 2022.

Downstream conditions

In the downstream, Galp's refining margins reinforced a picture of weakness across Europe in the fourth quarter, following a similarly downbeat assessment from Austria's OMV. Galp's refining margin was down 24% on the year at $3.30/b in Q4.

However, the company managed to increase throughput volumes, which were up 38% on the year at 26.5 million boe.

Galp operates two Portuguese refineries, the 220,000 b/d site at Sines and the 110,000 b/d facility at Matosinhos.

Thanks to increased throughput, Galp's refined product sales rose by 18% on the year to 4.2 million mt.

Galp's gas and power segment meanwhile benefited from robust regional power demand in Q4.

Its Q4 natural gas sales volume increased by 16% on the year and by 10% from Q3 2019, to 2.0 Bcm.

It publishes full 2019 results on February 18.