Supply and trading 

 

Galp Energia has a wide range of crude oil suppliers in more than 16 countries located in the Mediterranean Basin, West Africa, the Persian Gulf, America and other regions. In 2010 our main crude oil suppliers include companies situated in Angola, Nigeria, Equatorial Guinea and Cameroon. Occasionally, we acquire refined products in the international markets to better meet demand for oil products, namely diesel, which reached 218 thousand tonnes in 2010.
 
In Spain, oil products are acquired under swap contracts with the main operators. For Galp Energia, safety of supply is a major concern. Therefore, we seek to diversify our supply sources by acquiring crude from a diverse range of countries and developing our own production. This strategy guarantees access to supply sources.
 
Extreme volatility in prices, particularly of raw materials, affects the refining margin. This means our selection of crude oil and method of using facilities are particularly important. The right selection and procurement of raw materials guarantees the highest returns from facilities. Our approach also increases refining margins by assuring high rates of reliability and equipment availability, and maximising processing returns. Additionally, these methods ensure we comply with safety and environmental protection requirements.
 
We define the refineries' production yield and raw material procurement plans through a linear programming model comprising a process simulator associated with a financial optimiser. This complex mathematical model optimises refining margins by defining the facilities' working regime and choosing the most appropriate raw material, after combining market demand requirements, the availability of raw material, prices, operating restrictions and processing returns. We guarantee continuous improvement of this process through an ex post systematic analysis of deviations from the forecasts and by identifying the causes and respective corrective measures.

Origin of processed crude

Galp Energia processes several types of crude; predominantly light crude. The increase in the refining system's complexity, which will imply a higher capacity to process heavy crude oil, will make it possible to benefit from the difference between the prices of heavy and light crude oil.

In 2010, Galp Energia acquired 83.9 million barrels of crude oil. Sweet crude oil continues to dominate Galp Energia's basket of crude grades, reaching in 2010 65% of total crude acquired, as optimised production is enabled by a model that calculates monthly the crude mix required to maximise the refining margin.

Galp Energia's supply sources remained diverse, led by the African west coast - Angola, Nigeria, Equatorial Guinea and Cameroon - which accounted for 32% of crude imports. 

 
Export of oil products

Galp Energia participates in exporting oil products. Gasoline and fuel oil are the most exported products due to the extra supply in the Iberian Peninsula.
 
Galp Energia's main export markets are the USA – where we predominantly export gasoline – Mexico and the UK.