Looking for sustained growth at a time of structural imbalance and lower demand in the European refining sector, many companies are looking to new markets to increase efficiency and maximize cash flow. This strategy is being followed by Galp Energia, one of the leading suppliers of oil and gas in Iberian markets.

Based in Lisbon, Portugal, Galp has adopted a number of strategies to optimize its refining and marketing business. One key step the company has taken is to increase sales in international markets, primarily by leveraging expected growth in Africa. It is also seeking to improve the competitiveness of product marketing in the Iberian Peninsula.

In its third-quarter 2015 report, Galp noted that it enjoyed high refining margins during the first nine months of 2015 due to refinery upgrades and an improved maintenance system. Marketing has also been stronger, the company said, with an improving Iberian market and the operational efficiencies that we continue to implement in the business.

The company noted that the economies of both Portugal and Spain are improving. So, our activities in the retail market are improving, costs are coming down and our operation is getting more efficient, the report stated.

Expanding in Africa

According to Francisco Lima Aires, manager of the companys exports division, Galp Energia operates two refineries in Portugal, with a total processing capacity of 330,000 barrels per day, and it distributes its products in Portugal and Spain through 1,300 service stations. Although the refining and marketing business is centered on the Iberian Peninsula, the company is expanding its sales in selected African markets, he added.

Galp has its origins as a gas company, founded in Lisbon in 1846. Today, the company is one of the leading operators in the Iberian Peninsula, said Lima Aires, with operations that range from oil and natural gas exploration and production, to refining and distribution of petroleum products, including the distribution and sale of natural gas, and power generation.

Analysts expect Galp Energia to be one of the fastest growing companies in the oil and gas sector in coming years. This growth is supported by investment in exploration and production, involving nearly 40 projects spread around the world, Lima Aires related.

As part of this growth, Galp is expanding its activities into different markets in Africa. Lima Aires said, Galp Energia operates in seven countries in Africa – Angola, Cape Verde, Gambia, Guinea-Bissau, Malawi, Mozambique and Swaziland – with direct investment in the downstream oil sector, operating 148 fuel stations and 21 storage plants on the continent.

According to Lima Aires, After operating for more than 20 years in these countries, were ready to invest in new markets and expand our presence in Africa. Our size allows us to provide the support required in the lubricants business. Above all, we want to be genuine partners with our clients.

He added, Galp Energias experience guarantees the quality of its products, which meet the most stringent international standards of quality, safety and respect for the environment. The company has also sought to establish a daily presence in customers lives, whether on the Iberian Peninsula or in different countries worldwide.

As a measure of its success, Galp points to its presence on important indexes measuring financial performance, best practices and sustainability in economic, environmental and social areas. These include the Dow Jones Sustainability, Corporate Knights Global 100, Climate Disclosure Leadership Index and FTSE4Good Index Series.

The FTSE4Good Index Series measures the performance of companies demonstrating strong environmental, social and governance practices. The index is used by investment advisors when creating or assessing responsible investment products.

Road to the World

The exports division sells fuels, bitumens, base oils and lubricants in 17 countries, through international distributors from Europe to the Middle East, including South Africa, France, Tunisia, Ecuador, Indonesia, Philippines, China, Peru, India and Qatar. Galp is focused on export markets, according to Lima Aires. Currently, we export more than 4 million tons per year in oil products, including fuel oil, gasoline, diesel, liquefied petroleum gas, lubricants and naphtha.

While Galp Energia is the leading lubricants marketer in Portugal, exports represent a significant percentage of its total sales, and the export division sells about 24 percent of the companys total lubricant production abroad. Lima Aires claimed. We have managed to win over several markets, and we see great potential for worldwide growth in the lubricants sector.

The company operates a lubricant blending plant at the Matosinhos, Portugal, refinery with a capacity of 80,000 tons per year of lubricants and 2,000 t/y of grease. The API Group I paraffinic base oils used to blend the lubricants are also produced at the Matosinhos refinery, in a production unit integrated into the blending plant.

The unit produces Solvent Neutral 100, 150 and 500 as well as bright stock for use in the companys range of mineral oil lubricants. For the synthetic lubricants range, Galp imports from international base oil producers.

At the Matosinhos production complex, Lima Aires explained, we use high-quality additives and produce lubricants that meet the latest international specifications, including ACEA, API, NMMA and JASO, as well as the main car and heavy vehicle manufacturers specs: Volkswagen, Mercedes-Benz, Porsche, Volvo, Man and others.

Environmental Focus

Lima Aires said that Galp Energia is particularly sensitive to the special logistical issues posed by exporting to Africa. As a result, we deliver bitumen in bags – a solution called BituBag – which has proved to be a success and shows a high potential for growth.

The BituBag has several environmental, safety and storage management advantages, he explained. Its structure allows for the shipping of more than 12 tons of bitumen in a single container (corresponding to 12 bags of 1 ton each). Transport costs are reduced by up to 20 percent as a result of the optimized volume and tare weight of the containers used.

The BituBag also can be stored at ambient temperature for long periods, saving energy costs. In the melting operation, use of the BituBag reduces energy costs by up to 8 percent compared with traditional solutions (drums and isocontainers), said Lima Aires.

Base oils are shipped in flexitanks, allowing the product to be transported in 20-foot containers by truck, ship or train and enabling intermodal transport. Currently, the most common size of flexitanks allows for around 20 metric tons or 24,000 liters to be transported, Lima Aires explained.

He added that flexitanks provide many benefits, including quick door-to-door delivery and the elimination of storage costs at discharge ports and demurrage, compared to bulk transport. Customers can also optimize their capital outlays by buying just the amount they need rather than the 3,000 to 5,000 tons of other bulk shipment options. Finally, flexitanks are environmentally responsible because they can be recycled.

Product Portfolio

Galp Energia supplies lubricants for the full range of automotive and industrial applications. Its Galxia brand lubricants are for use in heavy-duty vehicles subjected to severe operating conditions, and Transoil automatic transmission fluids can be used in synchronized and nonsynchronized light- and heavy-duty vehicle gearboxes.

For agricultural applications, which increasingly depend on special equipment, Lima Aires said, we have a line of lubricants that meets the specifications of the main producers. Also, for building contractors and mining operations, our Multitrans manual transmission fluids protect against wear in gears, compressors, mechanical shovels and bearings.

Galp Energia supplies several types of hydraulic lubricants – branded Hidrolep and Hidroliv – as well as a wide variety of industrial lubricants. Transgear gear oils include a lead-free extreme pressure agent, Lima Aires related, and Lubarep AR, Termoil, Polar and Solpac lubricants are for use in both dynamic and volumetric air compressors and refrigeration systems. The product portfolio also includes greases and specialized auto products such as brake fluids and antifreeze.

Lima Aires continued, Technical support is an important part our business, from presale to after sale. We provide used oil analysis, field tests to ensure that we recommend the right lubricants, computerized lubrication management systems, control of lubricants during their use, as well as training courses.

In conclusion, Lima Aires said that the lubricants business is a strategic driver of the companys growth. After operating for more than 20 years in Angola, Mozambique, Guinea-Bissau, Cape-Verde, Swaziland, Gambia and Malawi, were more than ready to invest in new markets and expand our presence in Africa. Our size allows us to exercise the follow up and service required in the lubricants business. Above all, we wish to be genuine partners to our clients; we want to grow and we want them to grow with us.