Strategy

We work for Galp to be a resilient and agile Company, prepared for a complex and dynamic world, with a strategy that reflects an integrated energy company focused on the development of sustainable and value generators businesses, with the final purpose of improving the lives of our customers.

Galp's strategy is based on the execution of our competitive upstream portfolio, an efficient and dynamic refining and midstream activity, a commercial business focused on the needs of our customers, and on the development of a profitable renewable portfolio and new business models, supported by innovative and differentiating solutions that promote the transition to a low carbon economy.

Our capital allocation guideline foresees the investment for growth across the energy value chain, with over 40% of future investments expected to capture opportunities coming from the energy transition. This growth path should further stimulate value creation that should continue enabling incremental shareholder returns.

This strategy is built on sound financial strength and a customer-centric and partnership-prone organisational culture. We are continuing to build a more agile, innovative and technologically evolved corporate environment that prepares us for the challenges and dynamics of the energy sector against a backdrop of major uncertainty and complexity.

We are committed to applying the best ESG practices in the pursuit of our activities, acting ethically and responsibly, involving relevant stakeholders in each decision, valuing our human capital, managing the risks and opportunities arising from the relationship between energy and climate, ensuring the protection of people and the environment in our operations and fostering a culture of innovation and technology.

Galp is committed to developing its value-focused E&P strategy by optimising and maintaining its portfolio competitiveness, while delivering a strong and sustained cash flow, based on its high-quality assets that can deliver an above-average production growth of around 10% p.a. until the end of the decade.

The strategy is based on: (i) protecting value through a proper execution of ongoing projects, on time and budget, and selecting the best development options, (ii) maximising potential of current portfolio by increasing recovery factors and cost efficiency, (iii) ensuring a balanced exposure to natural gas and (iv) selectively identifying opportunities in places where there is a competitive edge or strategic angle, so as to maintain the resilience and competitiveness of future production.

Galp will focus on adapting its refining system to future market needs, simultaneously increasing efficiency, flexibility and reducing its carbon intensity.

Our industrial system will pursue a strategy to continuously adapt to the European effort to promote circular economy, decarbonisation and energy transition, remaining a regional reference in this transformation.

Our natural gas business is expected to take advantage of existing opportunities in the global gas market, continuing to identify and develop new markets and ensure the maximum value of the natural gas and LNG portfolio.

Galp is focused on optimising the integrated offer of services and products, adapted to new consumption patterns, in an open, digital and sharing economy. In order to better achieve this goal, we integrated throughout 2019 the entire commercial offer of B2B and B2C segments into one single business unit. We also want to improve our operational performance and our customers’ experience, by developing internal talent and using the best technological tools on the market. We believe that this approach will help us assess the needs of our customers better and propose satisfactory solutions for them.

With regard to mobility, we wish to continue being a reference for our customers. We know that each specific need will translate into a different solution for sustainable mobility. We work to ensure that, for each of them, we will have an offer that is adjusted to our customer’s journey. The expansion of our electric mobility business follows on from this, creating important synergies with existing products and services.

For homes, buildings and cities, we intend to continue transforming our operations, offering solutions that improve each community’s standard of living, boosting energy efficiency and reducing costs.

The global challenge of decarbonising our society requires all economic activities and, the energy sector in particular, to conduct a thorough review of its own processes. The goals of the Paris Agreement, the intention of several countries to achieve carbon neutrality in their economies and the way these objectives are being pursued across the globe will be key in establishing the strategies of companies worldwide.

Galp aspires to take an active role in shifting the energy paradigm, namely by anticipating new trends, adapting its portfolio to future needs, exploring synergies with its current Iberian activities and by promoting a progressive reduction of its carbon intensity.

The ongoing digital transformation has set the scene for innovative products and services to replace the previous alternatives, with clear benefits for people in general. In order to materialise these opportunities, we intend to identify new value pools in which we can be a reference for the market, develop new business areas and try out different solutions for our customers. We are looking for new answers to the challenges of mobility, namely urban, using technological tools that allow intelligent fleet management and integrated urban planning systems.

Galp aims to develop a profitable renewable power generation business, with 10% to 15% of the Group’s future investment to be allocated to those activities as well as to new businesses that could be scaled up.

We will expand our renewables’ business leveraged on proven technologies, like solar PV, and taking advantage of the existing natural hedge to our power commercial activity in Iberia. Galp’s renewable portfolio consists of 3.3 GW capacity to be installed and operating by 2023, and with a longer-term ambition to reach around 10 GW by 2030, starting in Iberia but looking to explore opportunities in other regions where we believe to have competitive advantages. We will also support our customers in this transition, developing decentralised generation solutions, tailored to their needs.

We will continue investing in innovation, research and technological development, which are crucial for extracting value from our assets and for the creation of new business models, thus fostering the sustainability of the Company and the communities in which it operates.