Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Galp Energia SGPS SA (GLPEF, Financial) reported a robust performance despite a challenging refining and commodities price environment.
- The company is confident in exceeding its full-year guidance, with key projects progressing well.
- Strong contributions from the midstream division, particularly due to rising gas prices, have been noted.
- The Bacalhau project is on track, with sail away from Singapore to Brazil expected in December.
- Galp Energia SGPS SA (GLPEF) is making significant progress in Namibia, with multiple wells planned and high-resolution seismic work underway.
Negative Points
- The company is facing challenges in meeting its capex guidance, with less than EUR1 billion per annum on average proving difficult to achieve.
- There are delays in the lithium joint venture with Aurora, with the project timeline pushed back due to regulatory and technical issues.
- Galp Energia SGPS SA (GLPEF) has not yet received any cargoes from Venture Global under the long-term contract, impacting midstream expectations.
- The refining margins have come down from earlier levels, with uncertainty in the global economy, particularly in China, affecting future outlooks.
- The company is cautious about taking FID on the Aurora project due to market challenges and the delay in lithium mining in Portugal.
Q & A Highlights
Q: How should we think about the medium-term outlook for the midstream division, particularly with the additional volumes from Venture Global?
A: Rodrigo Vilanova, Energy Management, stated that they expect to maintain a strong contribution from the midstream division. However, they have not yet received any cargoes from Venture Global under the long-term contract, which is disappointing. Despite this, they anticipate a robust performance going forward.
Q: Can you provide more details on the Namibia drilling campaign and the strategic reasons for the timing of the wells?
A: Filipe Quintin Silva, CEO, explained that the current well is an appraisal well targeting a specific area, and the gap between the first and second wells is due to ongoing seismic analysis. The drilling schedule is not related to rig availability, and they are comfortable with the hardware availability for Namibia.
Q: What is the status of the lithium joint venture with Aurora, and what are the reasons for its delay?
A: Filipe Quintin Silva mentioned that the project is in the final phases of engineering and discussions about incentives. The market is challenging, and they are not rushing to take a final investment decision (FID) until they see appropriate returns. The delay is partly due to the lack of lithium mining in Portugal.
Q: Could you provide an update on the Mozambique divestment process and the impact of recent elections on the project?
A: Filipe Quintin Silva stated that the divestment process is progressing as planned, with significant capex still being accounted for. The Coral North FLNG is progressing well, and the Rovuma LNG project is ongoing. They expect to book the proceeds in Q1 next year.
Q: How do you view the refining market outlook for next year, and what are the implications of the new refinery in Nigeria?
A: Ronald Doesburg, Industrial, noted that refining margins have come down and the global economic outlook, especially in China, brings uncertainty. The new refinery in Nigeria will increase pressure on gasoline exports, but they believe margins will not fall to the low levels seen in Q3 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
