Portugal weighs concentrating its Galp stake in the Sines refinery

Portugal’s government is considering concentrating its stake in Galp in the Sines refinery, Environment and Energy Minister Maria da Graça Carvalho said on Tuesday, a move that could give the state greater influence over the country’s only active refinery as the energy group explores changes to its business structure.

Speaking in parliament, the minister said it “may not be out of the question” for the state to focus its holding on refining, “which is what interests us”, without additional cost and with greater power at the refinery. The comments came after lawmakers asked what guarantees exist that Galp will keep operating in Portugal while it continues to pursue a separation between its commercial and industrial activities.

The Portuguese state holds 8.2% of Galp through Parpública, a stake valued at about €1.13 billion at market prices, according to the information provided. Amorim and Sonangol together control 36.69% of the oil company, while more than 54% of the capital is free-floated. Economy Minister Castro Almeida also said in an interview published on Monday that increasing the state’s position in Galp could not be ruled out.

Galp had been working on a partial merger deal with Moeve that would have combined its commercial business, including retail, and its industrial business, including refining, but that plan collapsed. The company later said it remained interested in seeking new partnerships for its retail and refining operations.

Carvalho said Portugal has “very direct mechanisms” to act if any future deal involves funding from outside the European Union, including the power to impose conditions or oppose a transaction under a 2014 decree-law and a 2019 EU regulation. If financing comes from within the EU, she said the government’s room to intervene would be limited to competition issues or to the state’s position as a Galp shareholder.

Originally published at Eco.pt