Galp’s Gas Surge and Oil Output to Cap Portugal’s Winter Fuel Costs

Portugal-based Galp Energia has quietly shifted the balance of its energy portfolio in the final quarter of 2025, a move that could stabilise winter utility bills and shape fuel-pump prices well into 2026.

Why This Matters

• 54% leap in natural-gas trading gives Portugal an extra cushion against price spikes.

• Refinery maintenance at Sines temporarily crimps diesel and jet-fuel supplies but boosts profit margins.

• Upstream oil output still edging higher, anchoring tax receipts for the national coffers.

• Full results land on 2 March—key for anyone holding Galp stock or an energy-linked pension fund.

Upstream: Oil Keeps the Lights On

Galp’s exploration fields in Brazil and Angola lifted daily output to 113 kboe/d, up 2% versus the same period in 2024. Oil stayed dominant at 87% of the mix, ensuring steady royalties for the Portuguese treasury. The company expects new wells at the Bacalhau block to push production to 127 kboe/d in 2026.

Midstream & Refining: The Planned Slowdown

A 50-day overhaul at the Sines refinery—which covers roughly 90% of Portugal’s fuel demand—slashed processed feedstock by 56%. Counter-intuitively, tighter supply widened Galp’s refining margin to USD 6.9/bbl, a 32% annual jump. Analysts call the dip in throughput “one-off” and see normal volumes returning this spring.

Natural Gas: Trading Desk Takes Centre Stage

Unseasonably mild weather in northern Europe let Galp redirect stored LNG to spot buyers, catapulting gas trading volumes to 18.1 TWh. Fresh cargoes from Venture Global and a flexible contract with Brazil’s Comgás underpinned the surge. Retail gas sales at home were flat, holding near 4.3 TWh.

Renewables: Capacity Up, Output Down

Installed green capacity hit 1.7 GW, but weaker winter sun and low-wind spells cut quarterly generation by 51% versus the previous quarter, to 356 GWh. Even so, Galp banked a modest 3% year-on-year rise. The average realised power price fell to €50/MWh, mirroring lower wholesale benchmarks across Iberia.

Early Financial Read

Management’s trading update pegs Q4 EBITDA at roughly €610 M, with operating cash flow of €443 M. For 2025 as a whole, Galp says it met guidance at €3 B EBITDA—vital headline numbers ahead of the audited release.

What This Means for Residents

• Petrol & diesel prices: The refinery shutdown tightened supply in December, but margin gains mean Galp can absorb part of the cost once units restart. Motorists should see only minor bumps at the forecourt.• Gas bills: Higher trading income allows Galp to lock in cheaper LNG cargoes for 2026 contracts, tempering household tariffs if global prices stay volatile.• State revenue: Consistent upstream performance safeguards a slice of corporate tax and royalty flows that feed into public-service budgets.• Green transition: Slower renewable output is a weather quirk, not a policy reversal; rooftop-solar adopters still benefit from generous net-metering rules.

Investor Angle

The March earnings call will clarify whether the Bacalhau ramp-up keeps capital expenditure in check while funding the accelerated 4 GW renewables target. Dividend hunters will watch free-cash trajectories; so far, leverage sits comfortably below 25% of capital employed.

Looking Ahead

With refinery maintenance behind it, Galp enters 2026 counting on a gas-heavy winter and the first full year of Venture Global LNG deliveries. If Brent prices hold near the mid-USD 80s and Iberian power markets stabilise, the company appears positioned to fund growth while offering Portugal a steadier energy landscape.