Galp’s new president: “We cannot be afraid to make difficult decisions” | energy

On the first analyst conference call as President of Galp, oil company’s new Executive Leader (CEO) Andy Brown stated that his “first priority for Galp is to establish a strategic direction for the company”.

Shell’s former CEO, who a few weeks ago replaced Carlos Gomes da Silva in the helm of the Amorim-controlled oil company, said he had found a company with valuable oil reserves, a good brand, and solid refineries and commercial activities on the activities Iberian Peninsula and with great ambition in the field of renewable energy.

“Now we need to get our strategy straight and not be afraid to make difficult decisions,” said Brown. This clarification was promised by the new President of Galp in May for the company’s annual meeting with investors and financial analysts on Capital Markets Day.

“We have to make difficult decisions, we have to be very clear about what we want because we cannot afford to do everything. I think we need to have this clarification in May, ”he reiterated.

The promise for now is to accelerate the transition to low carbon technologies while remaining “a good investment opportunity”.

In the remote analyst meeting that followed the presentation of the 2020 results – in which the oil company posted a € 42 million loss due to the impact of the pandemic crisis – Andy Brown admitted that the Sines refinery was “one of the key strategies is problems “.

When asked by an analyst whether Sines will continue to be profitable in the near future, the manager pointed out that while Sines is more profitable than the Matosinhos refinery, which the company has already decided to close, “the world is changing”. .

It needs to be recognized that the demand for liquid fuels will decline in the future and an understanding of how Sines will fit into a market with these terms and what level of investment will be appropriate, he said. “These are big questions for the future,” says the new president of Galp.

Regarding Matosinhos, the new president of Galp says that the most important thing now is to “have a good plan for the people” and to know how to responsibly “shut down and decontaminate”. The future of the facility is soon to be seen.

In May, when he unveils the axes of the strategy, Brown will also present updates on the compensation policy.

The statement that the estimated level of oil production for this year and the expected dividend (50 cents, less than the 2019 70 cents but more than the 2020 35 cents) are a sign of the “caution” of those who believe 2021 ” It will be a difficult year “and he still sees no” real sign of recovery “. Andy Brown emphasized that Galp’s “great ambition” in the renewable energy sector continues to be supported “by solid” oil exploration and production.

For Galp (which operates on a $ 50 oil drum scenario and production costs of $ 3 a barrel), these are the assets that “create the platform for transition [energética] effectively ahead of the competition ”. Galp has “enviable assets” in the Brazilian Vorsalz and Mozambique, he stressed.

With investments of 500 to 700 million euros in 2021, the highlights will be the start of another exploration project in Brazil (Bacalhau) and the strengthening of the solar portfolio.

The oil company would like to have 1.2 gigawatts (GW) of renewable electricity installed by the end of the year and already has a project portfolio of 3.7 GW in the initial phase (with land and guaranteed grid connection) with the aim of achieving 10 GW in 2030.

Recalling that just over a year ago, none of this existed, Andy Brown said that Galp “is clearly a company that can make change quickly”.

On the flip side, Brown said he hoped to bring traits like “team spirit” and “the right focus on innovation” to the company, telling analysts that he wanted to “take a great team and take it to the next level”: “Let’s make this a really dynamic company.”