Galp workers criticise Environment Minister’s “complicity” in deal with Moeve

Petrogal’s Central Workers’ Commission (CCT, in the Portuguese acronym) on Monday criticised statements made by the Minister for the Environment and Energy regarding the deal between Galp and Moeve, rejecting the idea that the Portuguese company will grow as a result of the deal.

Last week, Maria da Graça Carvalho was optimistic about the negotiations between the two companies to merge their refining and fuel businesses in the Iberian Peninsula. The minister rejected the idea that the operation represents a strategic loss for Portugal, arguing that Galp will gain influence over a wider range of refining assets in the Iberian Peninsula.

“No, Minister. Galp will not be much bigger than it is today; on the contrary, it will be smaller”, said workers’ representatives in a statement on Minister Maria da Graça Carvalho’s remarks.

In the CCT’s view, the minister “even invented that with a stake of around 20% in the company to be created (…) Galp will now have two refineries in Spain. This position is unacceptable and exposes the minister’s complicity, but above all, the degree of distortion of reality she is willing to assume to justify yet another disastrous deal for the country”.

At issue is the non-binding agreement signed between Galp and the shareholders of Moeve (formerly Cepsa) – Mubadala Investment Company, the sovereign wealth fund of the United Arab Emirates, and the US fund The Carlyle Group – to move forward with discussions on merging their respective downstream portfolios (refining, petrochemicals and fuel sales) in the Iberian Peninsula.

The plan under consideration provides for the creation of two new business platforms: one dedicated to fuel retail and mobility (RetailCo), which will bring together the filling station networks and will be jointly controlled by Galp and Moeve, and an industrial platform (IndustrialCo), focused on refining, petrochemicals, trading and low-carbon fuels (such as biofuels and hydrogen).

Galp will have a minority stake of over 20% in this industrial platform, while the majority of the capital will remain in the hands of Moeve’s shareholders. Among the assets potentially integrated is the Sines refinery, considered strategic for national energy supply.

“My position, and I am speaking for myself now, is that I see this from another perspective. When they say that we have lost control of one refinery, I say that we have gained control of two others, because there are two in Spain”, said Maria da Graça Carvalho, referring to the Moeve refineries in San Roque, Cádiz, and Palos de la Frontera, Huelva. “So there will be three refineries in which Galp will now have influence”, she added.

For the CCT, the minister “followed the example of the Prime Minister in his New Year’s speech”, from a motivational perspective: “That thing about the glass being half full or half empty”. For the workers’ representatives, the situation is one of a glass half empty, with “the loss of influence over what remains of the refining apparatus that still guarantees national sovereignty” and “Portugal’s inability to produce all the solid and gaseous fuels it needs”.

The CCT criticised the Executive for not revealing whether there are conditions imposed on Galp to ensure energy sovereignty or the retention of workers, and if so, what they are. “The administration must do so immediately, assuring the public and workers that it will not lay off anyone, that there will be no collective redundancies and that it will ensure the future of the Sines refinery in the national interest”, argued the CCT.

The minister stressed that the process is still in its early stages and that the companies have a year to negotiate the final terms of the agreement and submit it to the competition authorities – a period in which she believes the government will have time to demand guarantees. Maria da Graça Carvalho expressed confidence that the operation will pass the scrutiny of the competition authorities, even though she recognises the demands of the process.