Galp Energia, one of Portugal’s best known and biggest companies, has seen its profits fall nearly 30% in a quarter.
Galp, whose partnership with corrupt Italian state oil company ENI has triggered alarm bells in Lisbon and anger from anti-oil protestors, has the exploration and extraction rights for a block off the Alentejo coast.
A lower international oil price and a fall in local demand has seen Galp's profits collapse by 29% to €133 million leaving directors trying to explain how the year’s profits to date are 20% down to just €247 million.
Galp continues to invest in oil and gas exploration in Brazil and Angola but the current group debt, up €16 million to €2.483 billion, is uncomfortable when profits have dropped so significantly.
Galp’s activities are divided into three business segments: ‘exploration and production’ - ‘refining and retail marketing’ with two refineries in Portugal and a service station chain, and - ‘gas and power.’
In the Gas and Power segment, Galp Energia SGPS SA is mainly engaged in the distribution and marketing of natural gas, as well as in the generation and sale of electricity.
Galp reported to the stock market regulator that its fall in earnings was due to a 'lower contribution' from its refining and marketing business and from exploration and production - in other words, Galp's main businesses are becoming less profitable.
"These businesses were affected, respectively, by lower refining margins and the price of oil and natural gas in international markets," the statement read, offering little cheer to shareholders.
Galp’s main shareholder is a company owned by Portugal’s richest man, cork magnate Américo Amerim. Amorim Energia, B.V. Netherlands owns 38.34% of Galp with the taxpayer owning 7% of Galp via Parpública.
The President and the vice-president of Galp both are Amerim family members with Américo Amerim taking the top position and Paula Amorim, better known for her fashion business, the vice-presidency.
How and why Galp got involved with Italy’s state-owned oil company ENI defies polite description as ENI’s trail of corrupt practices, ecological travesties and overt bribery of officials has shown the company to be one of the worst offenders in an energy business renowned for backhanders and under-the-counter payments.
Portugal’s former Minister for the Environment, Jorge Moreira da Silva, remains under suspicion for approving the oil concession deals in the Peniche and Alentejo basins in which Galp is a partner. The lack of contribution to the public purse if the consortia find and produce oil or gas, marks these almost uni-lateral agreements as possibly the worst ever signed by a public official.
