Portuguese oil and gas company declares net profit of €251 million, down €55 million YoY.

Galp Energia, a Portuguese integrated oil and natural gas company, recorded a replacement cost-adjusted net profit of €251 million for 2011, down €55 million from 2010’s figure. The drop is attributable to underperformance of the refining and marketing business segment, says Galp Energia.

However, net profit of €79 million in 4Q11 was up €40 million YoY. The company has a refining capacity of 330,000bpd.

Capital expenditure in 2011 came to €1 billion, of which Galp’s refining and marketing business accounted for 64%, with €452 million used by the upgrade projects taking place at the Sines and Matosinhos refineries. These projects have entered their final stage of spending and €19 million was allocated to them in 4Q11.

Galp says the physical completion of Sines refinery is almost concluded. The project is aimed at maximising the refinery’s diesel output, while allowing increased use of heavy crude.  

Throughput amounted to 76mbbl in 2011, down 9mbbl YoY, mainly due to a 40-day technical outage at the Sines refinery in 1Q11. This worked to lower the company’s overall utilisation rate to 63% for 2011, down from the 75% seen in 2010. Total refined product sales fell by 1Mt, or 5.6%, to 16.3Mt.

In 2011, diesel accounted for 34% of Galp’s oil product output, followed by gasoline with 22%, fuel oil with 20% and jet fuel with 7%.

Exports from the Iberian peninsula declined by 4% in 2011 YoY to 2.7Mt, while total exports fell by 0.1Mt or 4.2% to 2.7Mt.

“The austerity measures applied in Iberia and, in general, the adverse economic environment impacted the Iberian market for oil products, which showed lower volumes sold, leading to a reduced contribution from the oil marketing business in 2011 compared with 2010, notwithstanding the improved performance in Africa,” the company says in its 4Q11 results.  

The refinery cash cost rose to US$2.3/bbl from the US$2.1/bbl seen in 2010. Galp Energia’s refining margin fell to US$0.6/bbl from the US$2.6/bbl recorded for 2010.