July 13 (Bloomberg) -- Galp Energia SGPS SA, Portugal’s biggest oil company, increased oil output in the second quarter and processed 2.7 percent more crude at its refineries.
Average working-interest production rose 18 percent from a year earlier to 25,800 barrels a day and average net entitlement output climbed 37 percent to 18,800 barrels a day, Lisbon-based Galp said today in a regulatory filing. Galp in April said it was targeting working-interest production of about 25,000 barrels a day in the second quarter.
Galp plans to invest 1.2 billion euros ($1.5 billion) a year from 2013 to 2016 as it explores in Brazil’s offshore Santos Basin, where its Lula project is located, and in Angola. By expanding access to crude supplies, Galp is seeking to curb dependence on refining and sales of fuel in Portugal and Spain.
The Portuguese company plans to exceed 300,000 barrels of oil equivalent a day in working-interest production by 2020. It has stakes in four offshore blocks in the Santos Basin, including 10 percent of Lula, the largest find in the Americas since Mexico’s Cantarell field in 1976.
Lula, formerly known as Tupi, holds an estimated 6.5 billion barrels of recoverable oil and equivalents. Galp and Brazil’s Petroleo Brasileiro SA are also partners at Cernambi, which holds 1.8 billion barrels of estimated reserves.
Shares of Galp have dropped 6.6 percent this year, valuing the company at 8.8 billion euros. Eni SpA of Italy and holding company Amorim Energia BV each own a third of Galp.
Galp is also investing in upgrades at its Sines and Oporto plants to increase diesel production. Galp on June 5 said new units at its Sines refinery will “gradually” start during the third quarter as it completes the upgrade project. The Oporto facility can process about 90,000 barrels a day, while Sines has a 220,000-barrel-a-day capacity.
The benchmark refining margin, a measure of profit from turning a barrel of crude into fuels, was $2.30 in the second quarter, compared with a negative margin of $1.20 a year earlier, Galp said today. Sales to direct clients dropped 6.6 percent to 2.5 million tonnes.
Natural-gas sales climbed 26 percent to 1.5 billion cubic meters in the period.
Galp is due to report second-quarter earnings on July 27.
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