May 3, 2017 [OPIS] - Portuguese energy group Galp saw its refining and marketing earnings in the first quarter of 2017 increase by 40 million euros ($43.6 million) year on year to 187 million euros due to an improvement in its refining margin.
Overall earnings rose 43% to 419 million euros, supported by strong results in the upstream sector amid increased production and higher oil and natural gas prices.
Galp’s refining margin increased from $4.1/boe to $5.1/boe in the first quarter, which the group attributed to “benefitting from sourcing opportunities.” The benchmark refining margin over the same period increased by $0.2/bbl to $3.9/bbl, with higher diesel and fuel oil prices offsetting the increased cost of crude oil.
Galp’s average oil and natural gas production increased 56% to 88,000 boe/d in the first quarter due to higher output from Brazil.
The refiner processed 26.1 million boe of raw materials during the first quarter, up 4% compared to the previous year, which had been affected by the planned outage of the hydrocracker at Sines refinery.
Crude oil accounted for 88% of raw materials processed, of which 84% corresponded to medium and heavy crude. Middle distillates (diesel and jet) production rose 3% year-on-year to account for 47% of total production, while gasoline accounted for 24% of production.
Galp owns two refineries in Portugal, the 220,000-b/d facility at Sines and the 100,000-b/d Matosinhos plant.
The marketing sector reported robust demand for oil products in the retail segment, as well as for jet fuel and marine bunkers in the wholesale segment.
The Iberian market for oil products grew 1.3% to 15.1 million tons during the first quarter, from 14.9 million tons at the same time last year, due to higher demand for diesel and LPG, resulting from higher economic activity and the implementation of a LPG incentive plan in Spain.
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