Portugal Invests in Oil, Gas Production in Libya

Excerpt from report by Portuguese newspaper Diario de Noticias website on 7 August

Galp [Portuguese oil and gas company] is going ahead with the exploration and production of oil and gas in Libya. The board of directors yesterday approved the setting up of a joint company with Lap-Libya Africa Investment Portfolio, for the exploration of oil and gas in that country, Galp sources told Diario de Noticias. Galp and Lap Libya will hold equal 45 per cent shares of the capital while Lap Switzerland will hold the remaining 10 per cent share, the sources explained.

The executive committee of the new company will have two Galp representatives, one is Galp's executive administrator for exploration and production Fernando Gomes, the other is the Italian Luigi Piro. The company will seek to explore oil and gas not just in Libya but also in other African countries to be determined by its shareholders.

Yesterday the Galp board of directors also approved a development plan for the famous Tupi camp, in the BM-S-11 bloc in the Santos Basin, Brazil. One of the world's largest oil reserves has been found here and Galp holds a 10 per cent share in it. The plan includes an investment worth 100bn dollars - Galp will provide the equivalent of its 10 per cent share, 10bn dollars, that is about 6.5bn euros.

The plan also includes the creation of a company based in the Netherlands, with the same shareholders of that Brazilian bloc. This company will seek to manage all the necessary acquisitions to implement the Tupi investment, according to the same sources. The idea is to speed up the start of oil extraction at that oil field, which is to start in March 2009 when extraction is expected to be 20,000 barrels a day, of which 2,000 will belong to Galp. The same sources added that Galp will only need to invest in this field in the first few years. After 2011, when production reaches 100,000 barrels a day, the cash-flow [words in English] will be positive. [Passage omitted]

Originally published by Diario de Noticias website, Lisbon, in Portuguese 7 Aug 08.

[BBC Monitoring European]