Galp Energia SGPS SA, Portugal’s biggest oil company, increased output in the first quarter from Brazil as its refineries processed more crude.
Average working-interest production rose 4.3 percent from a year earlier to 23,500 barrels a day, Lisbon-based Galp said today in a regulatory filing. Average net entitlement output, which includes the effect of production-sharing agreements, climbed 21 percent to 20,100 barrels a day. Galp on Feb. 11 announced a target of working-interest production of about 24,000 barrels a day for the first quarter.
Galp is exploring in Brazil’s offshore Santos Basin, where its Lula project is located, to boost access to crude oil supplies and curb dependence on refining and fuel sales in Portugal and Spain. The oil products market contracted by 7 percent in each of those countries last year.
The Portuguese company on March 5 said it will boost investment from next year to increase reserves. Annual investment will be 1.4 billion euros ($1.8 billion) to 1.6 billion euros for 2014 to 2017. Galp plans to invest 1.2 billion euros to 1.4 billion euros this year.
Galp on March 5 said it’s “on track” to meet its production target of 300,000 barrels of oil equivalent a day in 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.
The company processed 6.3 percent more crude in the first quarter from a year earlier. The benchmark refining margin, a measure of profit from turning a barrel of crude into fuels, widened to $2 a barrel from $1.10 a year earlier, Galp said. Sales to direct clients dropped 9.2 percent to 2.4 million metric tons.
Galp has invested in refinery upgrades to increase diesel production. The hydrocracker at the Sines plant started commercial production on Jan. 10, marking completion of a 1.4 billion-euro investment on a conversion project at its refineries. The plant in Oporto can process about 110,000 barrels a day, while the Sines refinery has a 220,000-barrel-a-day capacity.
Natural-gas sales slipped 0.2 percent to 1.72 billion cubic meters in the period.
Galp is due to report first-quarter earnings on April 29.