Galp Energia cuts investment by 500 million per year
The Portuguese company produced more oil in the first three months of the year, when prices sank. With the crisis, the company is cutting costs.
Portuguese oil company Galp Energia on Wednesday said that it will reduce operating and investment spending by more than €500 million a year in 2020 and 2021 to respond to the drop in demand.
“Considering the sharp drop in demand and prices of oil products, Galp is taking action to significantly reduce spending in the coming quarters,” the company said in a statement released on Wednesday to the Securities Market Commission (CMVM).
The company led by Carlos Gomes da Silva stated that some initiatives are already underway, others will be implemented according to market developments.
In a ‘trading update’ released on Wednesday, Galp Energia said that production reached 118,100 barrels of oil a day in the first quarter, which corresponds to a year-on-year increase of 19% and a fall of 3% compared to the last three months of 2019.
The refining margin fell 19% year-on-year and 43% compared to the previous quarter to $1.9 per barrel.
Oil product sales fell 13% year-on-year and 10% compared to the last three months of 2019, with Galp signalling that the fall in sales of oil products and natural gas reflects market conditions since March.
Galp’s quarterly results will be presented on 27 April before markets open.
Galp Energia’s shares at 9.50 a.m. had fallen 3.24% to €9.70.
