After implementing a scenario-planning process aimed at identifying long-term alternative outcomes for the energy sector, the Company’s strategy remains focused in the development of a resilient E&P portfolio, embedded with an efficient and competitive downstream business, supported by innovative and differentiating solutions that promote the transition into a lower carbon economy.
This strategy is supported on a solid financial capacity and on a culture which is client-centred and grounded on partnerships. Corporate culture should also boost a more agile, innovative and technology-based business environment. At the same time, the strategy is based on a meritocratic culture of autonomy and accountability that promotes talent development. With this approach, Galp is preparing to face the energy sector’s dynamics and challenges, within an uncertain and complex context, capitalising on the Company’s assets and competitive advantages.
Galp believes that ensuring the protection of people, the environment and assets, as well as the communities it operates in, and adopting an ethical conduct are crucial for its actions and strategic execution.
Galp aims to widen and protect its current E&P portfolio value by executing its main projects, including the development of world-class discoveries in the Santos basin pre-salt in Brazil and in the Rovuma basin in Mozambique. The Company is focused on extracting more value from those projects, namely by accelerating the resources’ time to market, optimising existing assets and starting the subsequent development stages of its oil and natural gas resources. Due to the sector volatility, Galp’s emphasis has been on a structural cost reduction to support the best development solutions and to increase operating efficiency, thus protecting long-term profitability, even when facing challenging scenarios of oil and carbon prices.
In an integrated manner and aiming at the long-term sustainability of its portfolio, Galp will seek to identify the best opportunities for exploration and resource acquisition. In that regard, the Company will maintain a balanced exposure to natural gas, according to clear and strict risk management criteria, and make the best use of competitive advantages and synergies with its current portfolio in geological and geopolitical terms.
Strategic partnerships with leading operators in the sector, in line with the specificities of each project, also help leverage Galp’s competitive advantages and enhance the sharing of knowledge.
Galp’s strategy aims to extract more value from its Refining & Marketing (R&M) business by strengthening its competitive position within the European refining industry and in marketing oil products and related services in Iberia
and Africa. The Company will also continue to ensure high safety and quality standards in its activities.
Accordingly, Galp will continue to focus on the integration of its refining and marketing activities, matching the profile and volumes of production to the market. It is crucial to have a greater focus on energy efficiency and process optimisation of the refining system to enable cost reductions and achieve a higher return on capital employed.
Presence in the African continent, where Galp has an important legacy, must be enhanced by strengthening its position as a local partner, with an active contribution to the growth of the region’s economies.
Galp will also seek to improve the performance of the oil products trading business by exploring new opportunities in global markets leveraging its geographic proximity to the African and North American markets, and on the strong growth expected in the Asian market.
The share of natural gas and electricity in the European and global energy mix is expected to continue to grow over the coming decades, making the G&P business an essential pillar in the Company’s strategy as an integrated player.
The Company is building a diversified, competitive and flexible portfolio. For that purpose, it is key that Galp secures access to competitive natural gas sources, as well as infrastructure, including transport and storage capacity, to support its commercial activity.
Galp must maintain its strategic position as an integrated supplier of natural gas and electricity in the Iberian market, while also exploring opportunities in potential new markets.
The trading activity will continue to promote a balance between medium and long-term contracts and spot operations, in order to support the supply activity and to benefit from market opportunities.
Energy transition and the new paradigm in consumption
Global energy consumption is now in an electrification process, supported by the digital transition over recent years. Simultaneously, the renewables sector has grown and its competitiveness against fossil energy powered systems has gradually increased, not only by cost reduction but also supported by public policies of compliance with environmental targets.
Galp aims to be an active partner in changing them energy paradigm by anticipating trends; making its portfolio adequate to future needs; creating synergies simultaneously with current activities; consolidating the Company’s know-how and enhancing asset diversification, with the corresponding risk reduction, namely through lower carbon intensity energy.
At the same time, emerging economies proceed in seeking better access to energy and the well-being which it provides.
Galp will continue to work with local communities in the countries it operates in, by supporting the creation of conditions for an optimal use of the available resources.
Galp assumes that the structural transformation in energy demand will imply creating solutions that are innovative and increasingly more sustainable at an economic, environmental and social level.
In connection to the ongoing digital transformation, a set of new capacities has arisen, with old solutions giving place to new products and services. Diverse areas such as mobility, decentralised energy production or domotics impact the energy sector, leading to significant gains in energy efficiency and to a wider range of options for clients.
Galp endeavours to help find the best solutions for its clients at any given moment. Therefore, the Company will continue to promote the transition into a client-focused organisation, with the skills for anticipating and fulfilling their needs.
To achieve that purpose, it will also develop partnerships that help complement Galp’s value proposition and to diversify its product and service portfolio, making it adequate to the natural dynamics of a market that is based on information and knowledge.
Innovation, technology and digitisation
Galp actively promotes innovation, research and technological development, as they are crucial for extracting added value from its asset portfolio, as well as for the Company’s long-term sustainability and that of the communities it operates in.
Galp manages its relations with stakeholders and, in particular, fosters the development of lasting and successful partnerships with leading energy players and with the scientific and technological communities. The Company believes cooperation and sharing experiences are essential to value creation, as well as to develop and implement new and innovative technological solutions and new businesses.
In order to face the industry’s transformational challenges, Galp shall invest in the organisation transition into a model that is strongly supported by digital solutions and information management. To that end, the Company will guide its employees to work and make decisions in highly complex and uncertain contexts.