Galp Energia, SA (GLPEF) CEO Carlos Gomes da Silva on Q4 2018 Results – Earnings Call Transcript

Galp Energia, SA (OTC:GLPEF) Q4 2018 Earnings Conference Call February 11, 2019 6:00 AM ET.

Company Participants

Pedro Dias – Head, Strategy & IR

Carlos Gomes da Silva – Vice Chairman & CEO

Filipe Silva – CFO & Executive Director

Thore Kristiansen – Executive Director & COO

Conference Call Participants

Oswald Clint – Sanford C. Bernstein & Co.

Flora Trindade – CaixaBank

Biraj Borkhataria – RBC Capital Markets

Robert Pulleyn – Morgan Stanley

Joshua Stone – Barclays Bank

Michael Alsford – Citigroup

Jonathon Rigby – UBS Investment Bank

Michele Vigna – Goldman Sachs Group

Alwyn Thomas – Exane BNP Paribas

Yuriy Kukhtanych – Deutsche Bank

Operator:Good morning, ladies and gentlemen. Welcome to Galp’s Full Year 2018 Results and Outlook Conference Call. I will now pass the floor to Mr. Pedro Dias, Head of Strategy and Investor Relations. Please go ahead.

Pedro Dias:Good morning, ladies and gentlemen, and welcome to the fourth quarter and full year 2018 results conference call together with a short-term outlook. Today, Carlos will start with a quick overview of Galp’s strategy execution during 2018 and an update on what to expect in the medium term. Filipe will then briefly cover the Q4 full results and full year results and also update us on key financial metrics going forward. At the end of the presentation, we will be available to take any questions you may have. Thore is here with us as well.

I would like to remind you that we may be making several forward-looking statements. Actual results may differ due to factors included in the cautionary statements available at the beginning of our presentation, which we advise you to read.

Carlos, the floor is yours. Thank you.

Carlos Gomes da Silva

Thank you, Pedro, and good morning to you all. Welcome. I will start with a quick recap of 2018 year. During the year – during 2018, the energy sector faced very significant volatility, with oil prices moving up and down more than $20 per barrel throughout the year. This only reinforces, once again, the strategic importance of Galp’s integrated business model. On the upstream front, we continue to develop the giant Lula and Iracema fields, ending the year with eight producing units, with the deployment of P-69 that has been located in Lula Extreme South at the end of October. Earlier this month, we had the first oil in unit number nine that has been located in the Lula North. Now the consortium is working on the enhancements that will allow us to maximize the value extraction from these outstanding assets, with the ambition to reach a 40% recovery factor. In Angola, production from Kaombo North project, that is in block 32, started in July; and the second unit, or Kaombo South, is already on location. In Mozambique, the development plan for the first phase of the Rovuma LNG project was submitted, now with much larger strength than the initial plan.

On the downstream side, we have taken advantage of the planned maintenance work in our refining system to implement some of the projects included in the one extra dollar per barrel initiative that you all are aware of. We have also taken the opportunity to make some adjustments to meet the future demand specifications that will arise from the upcoming IMO regulations that will enter in force next year. We continue to deliver a solid performance from our oil and gas marketing activities in Iberia and also in Africa, and we have done so whilst continuing to developing our business with a more client-centric approach, making progress in adapting our value proposition to meet customers’ demands. Everything we do reflects our commitments to sustainable practices, and once again, I’m glad to reinforce that this year, Galp was recognized by several of the most important independent entities as an industry leader in environmental, social and governance matters.

See Galp Press Release HERE.