Galp wants to accelerate investments towards the energy transition and foresees that 40% of the long term investment will be aimed at “capturing opportunities related to the energy transition”. For the oil company, this goal is to increase the weight of natural gas  in the production mix, a fossil fuel that is less polluting than oil and especially coal when used to produce electricity. And also for developing a “competitive electricity generation business from renewable sources” .

The solar energy is the chosen technology, although others are not excluded. The scenario for the new projects is the Iberian Peninsula where the electricity customer base is located, Carlos Moreira da Silva, CEO of the company, told analysts.

On the day it revealed a 33% drop in comparable results until September, partly justified by maintenance downtime at the refining business, Galp presents an update on the strategic backdrop. More than one billion euros a year, in which the investment share for the energy transition and new renewable energy business exceeds the amount to be dedicated to oil exploration and production, which has been the company’s major bet in recent years.

It should be noted, however, that the energy transition includes large investments for natural gas exploration in Mozambique and is expected to start in 2022. The company also notes that oil production projects are of “high potential” and will allow a return on break-even with a price starting at $ 25 per barrel.

Galp anticipates net investments of € 1 billion to € 1.2 billion a year by 2022, assuming that potential investments will emerge in this horizon that “will lead to the need for additional funds, which will aim for the development of relevant projects that will enable growth in the coming years. years”. For renewable energy projects 10% to 15% of this amount is planned, more than 100 million euros per year, but the information provided so far does not identify specific projects.

The CEO pointed out that these investments will depend on the return they generate and in the conference with analysts Carlos Gomes da Silva only pointed out that solar production is the priority, even if other technologies are not excluded. The strategy also involves developing new projects in the Iberian Peninsula, “where our customer base is”, and not acquiring plants already in production.

Despite being zero in the solar power auction, Galp has bought some projects already licensed from companies of Miguel Barreto, former Director General of Energy. The company also announced a long-term agreement for the purchase of electricity from renewable sources in Spain.

Galp is currently a company strongly exposed to fossil fuels , with its main activities focused on oil and natural gas exploration and production – two fossil fuels – gas trading in the international market, refining and distribution of fuels and trading of gas and electricity to end customers.

In the statement, CEO Carlos Gomes da Silva stressed that “we are preparing the company for its next growth cycle where we will be part of the energy transition, promoting solutions that are economically and environmentally sustainable, and maintaining, as always, the commitment socially responsible performance. Ongoing projects will allow us to focus on the selective development of our portfolio, focusing on increasing long-term growth and resilience while maintaining financial discipline and commitment to shareholder returns. ”

The company also announced a 10 percent annual increase in dividend per share payable to shareholders over the next three years, including already 2019, despite falling profits.

— Observador