Galp considers that gas production in the Rovuma basin may start in June

The executive director responsible for Production and Operations said that production of liquefied natural gas in the Rovuma basin, in northern Mozambique, is expected to start in June, with the first deliveries taking place during the second half of the year.

Quoted by Portuguese website "Eco Online", Thore E. Kristiansen said during a conference call with analysts to present the first quarter results that the project, in which Galp has a 10% stake, "is advancing ahead of schedule and below budget. He also said that security conditions are improving in the region, after attacks by ISIS-Mozambique rebels in the Cabo Delgado region in 2020 and 2021.

Galp started up the first exploratory well in block 6 in São Tomé and Príncipe on April 25th. Thore E. Kristiansen stressed that there is a lot of uncertainty about the existing oil reserves and a "high probability of failure", but if it goes well the potential could be high.

In Namibia, where Galp is the operator (80% stake) of block PEL 83, prospecting in neighboring areas opens the prospect of higher oil production potential and the oil company is recalculating its numbers.

About the news that Galp is evaluating the sale of its operations in Angola, the CEO preferred not to make any comment. "When we have news we will talk. At this moment we have nothing to say."

Limits on gas prices do not jeopardize profitability

Galp's CEO, Andy Brown addressed the Iberian agreement with the European Commission to cap the price of natural gas used to calculate the cost of electricity to 50 euros/MWh. Galp's CEO estimates that when the cap is in place the price of electricity will be limited to a range between 110 and 130 MWh and although this means lower revenue in renewables, it does not call into question the profitability of the projects.

"We will have slightly lower results in renewables, but they are still two to three times higher than we assumed in the projects," Andy Brown said. The official pointed out, however, that the cap on electricity prices will help consumers who are customers of the company.

Galp disclosed this Tuesday a 496% growth in first quarter profits, to 155 million euros, driven mainly by oil production, which benefited from the rise in the price of the raw material. The numbers were, however, below the average of analysts' estimates and the share even fell 5.8% during this morning.

Adjusted EBITDA increased 741TP2Q to €869 million, due to "strong upstream performance, supported by rising oil prices, and refining performance following the favorable international environment."

Despite high oil prices, Galp maintained the projection of an EBITDA of 2.7 billion euros in 2022, an operational cash flow of two billion and a net investment of 100 billion.

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