Galp denies ‘benefiting’ from the rise in natural gas prices. Oil production shows signs of recovery
Galp's oil production grew 2% quarter-on-quarter in the last quarter, despite falling compared to 2020. On the commercial side, the company says it doesn't benefit from the rise in natural gas prices.
Galp Energia produced less oil in the third quarter compared to the same period last year. There were 117.5 thousand barrels of oil per day, a year-on-year decrease of 2%. However, compared to the second quarter of this year, Galp’s production recovered the same 2%, compared to the 114.9 thousand barrels per day produced between April and May.
The company revealed the information in its usual trading update, a quarterly document that sheds light on the main operational and commercial indicators of the Portuguese oil company, as well as the macroeconomic conditions in the market. In the document, the company views the recent hike in natural gas prices in international markets, denying benefiting from it.
To justify the increase in the production chain, the group highlights the start of production in the Sépia field, offshore Brazil, which began operating at the end of August.
In total, Galp’s working interest production fell 4% year-on-year and stabilised in the chain at 128.2 thousand barrels of oil and equivalent per day. Meanwhile, net entitlement stood at 126.6 thousand barrels of oil and equivalent per day.
Production in Angola fell by 8% and production in Brazil shrank 4%, compared to the same period in 2020.
Between July and September, Galp processed 22.5 million barrels of oil and oil equivalents, a year-on-year decrease of 4%, but a chain growth of 7%.
Galp’s refining margin almost doubled compared with the previous quarter, increasing 71%, from 2.4 to 4 dollars per barrel of oil and equivalents, which the company explains with “the increase in middle distillate cracks.”
On the commercial side, sales of oil products to customers soared 15% year-on-year and 16% quarter-on-quarter: “Oil products volumes benefiting from the summer driving season and reflecting the gradual recovery in Iberia,” the company explained.
Natural gas sales to customers were down 18% year-on-year, while electricity sales soared 25%. The company concludes by signalling that “natural gas sales mostly following seasonality, with Galp not benefiting from the spike in gas prices”.