Government is ‘monitoring developments’ in negotiations between Galp and Moeve

The government is ‘monitoring developments’ in negotiations between Galp and Spain’s Moeve to merge part of their assets and create two new business platforms, as ‘strategic assets for national energy sovereignty are at stake,’ the Ministry of Economy said on Wednesday, after the Minister for the Environment told ECO that the Government views the alliance between Galp and Moeve as ‘positive’.

“As strategic assets for national energy sovereignty, environmental sustainability, competition and consumer protection are at stake, and without prejudice to the fact that this is a potential deal between private companies, the Government remains attentive to the progress of the negotiations,‘ the Ministry of Economy and Territorial Cohesion wrote in a statement, recalling that ’the State holds a qualifying stake of 8.24% in Galp’s shareholding structure, held through Parpública – Participações Públicas”.

This statement comes a day after the Minister for the Environment dismissed concerns about national energy sovereignty in relation to this deal. Maria da Graça Carvalho said that ‘it is important’ for Galp to grow. ‘We are aware of the advantages and possible disadvantages, but we are convinced that it will be positive,’ the minister told ECO/Capital Verde. Despite her optimism, she indicated that the matter will be assessed at government level by the Environment, Finance and Economy ministries. ‘We will monitor it very closely,’ she assured.

The alliance being discussed between the Portuguese company and the Spanish company Moeve, formerly Cepsa, will create synergies in the areas of refining, chemicals, trading, logistics, low-carbon fuels and mobility, and could lead to the creation of ‘a true European champion from Iberia’.

The minister emphasised that the deal brings a ‘large critical mass’ to Galp, making it ‘a very large company at the Iberian and global levels’. At the same time, she believes that the size of companies, particularly in the energy sector, is currently “important”, given that ‘there is fierce competition for investment’. And ‘having a large company always brings more advantages in terms of investment, wealth creation and job creation, while a smaller company always has more difficulties,’ she explains.

When asked about possible concerns that this deal could affect national energy sovereignty — one of the assumptions on the table is that Galp will retain 20% of the entity that will combine the industrial assets of the two oil companies, including the Sines refinery — the minister presents a more optimistic view. ‘We have gained control of two other [refineries],’ she points out, referring to the position that Galp will now have in the two former Cepsa refineries.

It should be remembered that on Friday, Galp’s Workers’ Commission demanded that the Government take a position in the negotiations between Galp and Moeve, warning of the risks of losing energy sovereignty and jobs. In a statement, the workers’ representatives (CCT) said they had been confronted ‘with tremendous news about the announced start of negotiations between Galp and Moeve,’ after which the Executive Committee held a town hall meeting to reassure workers. ‘However, fundamental issues remain unresolved, particularly regarding the real impact on support areas – business office – and all other areas where there is duplication of functions,’ they said.