(Bloomberg) -- Galp Energia SGPS SA's Chief Executive Officer Andy Brown said buying renewable assets is expensive at the moment, and the focus of Portugal's biggest oil company is mainly on developing its own projects.
Galp is following other large oil producers in expanding in renewable energy, and acquired a stake in a Spanish solar portfolio in 2020. While core refining operations at its Matosinhos refinery in Portugal ended earlier this year, its Sines oil refinery continues to operate. Galp also holds stakes in offshore oil blocks in Brazil.
“Most of our growth is going to be organic,” Brown said in an interview with Bloomberg Television on Wednesday. “Acquiring renewable assets is quite expensive at the moment. We'll look at whether there are opportunities out there.”
The International Energy Agency expects traditional fossil-fuel companies to increase climate-friendly investments to at least 4% of their capital spending this year from just 1% in 2020, the group said in a report on Wednesday. That still won't be enough to put the world on a path to limit a dangerous rise in global temperatures.
Big Oil's Green-Spending Boost Isn't Enough, IEA Says
Galp said earlier on Wednesday that its net annual average investment in the 2021-2025 period will be between 800 million euros ($976 million) and 1 billion euros. About 30% of that will be on renewable energy and 40% on the upstream oil and gas.
Galp aims to have an operating renewables capacity of more than 4 gigawatts by 2025. It's currently developing solar projects in Spain.
While some other big energy companies have spun off their renewable arms through initial public offerings, it's not a strategy Galp is considering, Brown said.
“It's not the moment for us to look at a spinoff of our renewable business,” said Brown, a former director of upstream at Royal Dutch Shell Plc, who started in his new role in February. “At the moment we're planning to keep it within the company, but de-consolidated off our balance sheet.”
©2021 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
