Galp is focusing on upstream growth in Brazil and Namibia with its refining spin-off.
The co-chief executive of Galp, Joao diogo marques da Silva, said on Tuesday that the company will "focus" on growing its upstream oilfields business in Brazil and Namibia. It may also list some of its newly created downstream business within a few years.
The company announced earlier this month that it was in discussions with Moeve, a private equity-backed firm, to combine their two businesses into two new?entities. One entity would focus on retailing and the other on refining.
The merger will exclude Galp's upstream production of oil and gas, which includes stakes offshore Namibia in undeveloped oilfields that are closely watched.
If the deal is successful, it will create two new companies, and one of Europe's largest refiners.
Analysts speculated that Galp could sell its upstream operations after the merger announcement.
Marques da Silva stated that Galp will focus on the growth of its upstream business, rather than be an acquisition target. Production in Brazil is expected to grow by 10% in 2026.
"We have an unique story upstream." In an interview given at the World Economic Forum in Davos, he stated that "we have built growth and a unique story of a very solid asset base." "We're looking at additional value-creation options."
He added that Galp could return to Angola if new opportunities arise.
Marques da Silva, the energy firm's CEO, said that after two years they would consider a public listing for their merger with Moeve. They also expect a final merger agreement in mid-2026 when valuations will be more clear.
Galp will control around 20% of'refining and retail ventures with Moeve.
He said that Galp would need clarification on regulatory issues relating to the retail sector, and consolidate its refining business and industrial operations. It would also need to complete the?investments and consolidate the refinery and industrial businesses before discussing an IPO.
The agreement between Galp, Spain's Moeve and Mubadala, the United Arab Emirates state-owned investment company, and Carlyle Group of the United States, is not binding.
One of the new companies would run 3,500 retail petrol stations, mainly in Spain or Portugal. It would sell more than 6 million metric tonnes of refined products each year.
The other would operate Moeve Huelva, Algeciras and Galp Sines refineries. Three facilities with a combined capacity of 700,000 barrels a day. (Reporting and writing by Dmitry Zhdannikov; Editing and proofreading by Louise Heavens, Susan Fenton, and Stephanie Kelly)
(source: Reuters)
