"We will have to invest a lot of money to reconvert the refinery," the oil CEO stressed, reiterating his request that the tax burden in Portugal be eased
According to Sapo's ECO source, Galp's CEO called on the government and tax authorities "not to tax" oil company projects in the country, arguing that investments "have to be competitive for the survival" of the company, at a time when it has a "deep" decarbonisation strategy underway.
Filipe Silva, speaking at the Sustainability and Society Forum, this Thursday, 11 May, in Matosinhos, warned that the Sines refinery will be the object of the biggest investment ever made by the oil company, around 2.2 billion euros, and that excessive taxes may compromise the implementation of these projects.
"We are already, as of today, trying to ensure that the Sines refinery does not suffer the same outcomes as Matosinhos. We are going to have to invest a lot of money to reconvert the Sines refinery itself," he said. The oil company decided to close the Matosinhos refinery in 2020, leading to the collective dismissal of 114 workers.
In parallel, he pointed out that the projects have to be economically viable, adding that part of that money would come from the sale of assets in Angola. In February, Galp announced it would divest upstream assets (production/exploration) in Angola to Sociedade PetrolÃfera Angolana (SOMOIL). The transaction is expected to close in the second half of this year and should total about €830 million, net of taxes.
"We are paying with Galp money for this energy transition. We sold the assets in Angola because they were not efficient and we are taking the cash flow from the old business [fossil fuels] to invest in new energies," he said in Matosinhos. Advanced biofuels (HVO@Galp) and green hydrogen (GalpH2Park) are two of the oil company's new ventures that will be launched at the Sines refinery. In all, they are about 486 million euros that aim to accelerate Galp's energy transition.
"When we closed the industrial units in Matosinhos, Galp's emissions fell 25%, so 75% of emissions must be reduced. The industrial unit that emits most in Portugal is in Sines. It is the largest unit in Portugal, but it also has the largest investment in decarbonization. We will invest in green electrolysis, take hydrogen for our own production process and decarbonise Sines," he said. In addition to Sines, the Matosinhos refinery was also the target of significant investment by the Portuguese giant as the day of its closure approached. According to Filipe Silva, around 700 million euros were left over the last 15 years of that industrial unit's life "as it was losing competitiveness".
"The concentration of Matosinhos' activity in Sines is not a silver bullet either," he added.
For Filipe Silva, this energy transition process of the oil company aims to help "reindustrialise Portugal", and it is "fundamental that the country cherishes companies and not just hotels and restaurants", but also companies "of an industrial base and nature".
Addressing the Minister of the Environment and Climate Action, Duarte Cordeiro, the CEO asked that those who decide to bet on Portugal are not treated "in a discriminatory way". "We are just asking them not to tax us, which is a big issue Galp has today. We do not want to be discriminated against, especially from a tax point of view," he stressed.