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OCTOBER 2007 INVESTOR DAY – Galp Energia

Galp Energia · Oct 22, 2007 · 89 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 1
    INVESTOR DAY Lisbon, 22 October 2007
  2. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 2
    STRATEGY OVERVIEW Lisbon, 22 October 2007 Manuel Ferreira De Oliveira, CEO
  3. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 3
    A FOCUSED MANAGEMENT TEAM Chief Executive Officer Manuel Ferreira De Oliveira Head of Refining, Head of Power Head of E&P and Head of Oil Marketing CFO Head of Natural Gas Supply and Logistics Andr Freire de International Oil…
  4. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 4
    A TOTAL RETURN OF 102% IN ONE YEAR +97% +21% +10% 23-Oct 23-Nov 23-Dec 23-Jan 23-Feb 23-Mar 23-Apr 23-May 23-Jun 23-Jul 23-Aug 23-Sep Galp Energia PSI20 Index DJ Euro Stoxx Oil & Gas Source: Bloomberg 5 Investor Day
  5. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 5
    PROVEN TRACK RECORD ON IMPLEMENTATION Conversion Project 9 Oporto Cogeneration Facility 9 Oporto Cogeneration Facility 9 Wind Farms 9 Wind Farms 9 CCGT 2 9 CCGT 2 9 Strategic plan CCGT 1 9 CCGT 1 9 CCGT 1 9 under…
  6. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 6
    GROWING WITH A MORE BALANCED PORTFOLIO R&M Target 50% G&P 25% E&P 25% 1H2007 G&P 26% R&M 57% E&P 17% 481 M 2006 G&P 33% R&M E&P 59% 8% 958 M 2005 G&P EBITDA 32% R&M adjusted 63% E&P Breakdown…
  7. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 7
    TOWARDS A MORE INTEGRATED OIL BUSINESS E&P 150 Kbbl/d Building an E&P Portfolio Improving refining Refining 300 Kbbl/d competitiveness Marketing 300 Kbbl/d Distributing refining throughput To be achieved 8…
  8. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 8
    TOWARDS A MORE INTEGRATED GAS & POWER PORTFOLIO New businesses New sources New sourcing Gas to contracts Power Midstream Trading Supply Spain Trading Sourcing Sourcing Supply contracts Supply contracts Portugal…
  9. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 9
    CAREFULLY MANAGING THE ENVIRONMENTAL RISK Galp CO2 emissions balance (Mton) Licenses for 2008-2012 period on PNALEs1 EU approval Expected reduction in CO2 3.4 0.2 emissions in line with estimated PNALE reduction 3.3 New…
  10. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 10
    BIOFUELS IS A NATURAL CORE BUSINESS TO GALP Oil value Mineral oil Logistics Refining Logistics Distribution production chain Biofuels Vegetableoil Vegetable oil value production production Logistics Biorefining Logistics…
  11. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 11
    STRATEGIC PRESENCE IN AFRICAN DOWNSTREAM Galp presence in Africa GDP growth of 15% in Angola in 2006 (35%-2007E) Positive EBITDA contribution (10M) Cape Verde Leverage on Galps access to oil & gas upstream and biodiesel…
  12. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 12
    TO BECOME AN INTEGRATED ENERGY COMPANY The right assets Integrated Sustained The right expansion value strengths focusing on creation return The right opportunities 13 Investor Day
  13. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 13
    EXPLORATION & PRODUCTION Lisbon, 22 October 2007 Fernando Gomes
  14. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 14
    LONG TERM PEAK OIL PRODUCTION ON CURRENT PORTFOLIO EXPECTED AT 80 KBBL/D 4 blocks offshore Working production evolution 34.0 Angola 2X 10 blocks offshore 3 areas onshore1 Brazil 17.0 12.4 9.5 7 blocks offshore 5.1 5.0 6.2…
  15. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 15
    GAINING SCALE IN E&P WITH LIMITED RISK PROFILE Working Production Rationale Strengths target (Kbbl/d) Building an E&P Flag carrier, with portfolio strong ties with Portuguese speaking 150 Attractive 14% IRR countries assuming…
  16. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 16
    EVALUATING NEW OPPORTUNITIES TO SUPPORT FURTHER GROWTH 9th round: 312 blocks being auctioned, onshore and offshore Galp already present in some of the basins Brazil Partnership with Petrobras MoU signed with PDVSA to study the…
  17. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 17
    CONTINGENT RESOURCES EVOLUTION CONFIRMS QUALITY OF EXPLORATION ASSETS IN ANGOLA (BLOCKS 14, 14K AND 32) Million bbl June 30, 2006 Dec 31, 2006 Reference crude price (Usd/bbl) 62.5 65.0 Proved (P1)2 35.6 35.7 +0% Net…
  18. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 18
    BLOCK 14 SIGNIFICANT DISCOVERIES IN 2007 Key highlights Location 11 commercial discoveries 2 recent discoveries: Lucapa-1 and Malange-1 More than 50 prospects identified 16 exploration and 16 appraisal wells drilled…
  19. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 19
    BLOCK 32 FAVOURABLE PROSPECTS Key highlights Location 12 commercial discoveries Two 3D seismic acquisitions covering whole block More than 20 prospects identified 16 exploration wells drilled 2 appraisal wells drilled Next…
  20. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 20
    BM-S-11 KEY ASSET Key highlights Location Tupi discovery Opening of a new hydrocarbon play Hydrocarbons in place: 1.7 to 10 billion boe Tupi Sul appraisal well proved the southern extension of Tupi discovery, located 9.5 km…
  21. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 21
    APPENDIX
  22. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 22
    UNDERSTANDING A PRODUCTION SHARING AGREEMENT Working Production Total Production Fraction of Shared production between the that is contractor and allocated to Cost Oil Profit Oil the recovering Concessionaire the at the terms…
  23. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 23
    WORKING PRODUCTION TO DOUBLE ON BLOCK 14 Working Production 34.0 Tmbua - Lndana production from CPT to start in 2010 2X Increase weight of light oil in working production 17.0 12.4 Natural production decline of Kuito 9.5…
  24. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 24
    BLOCK 14 STRONG GROWTH IN PRODUCTION EXPECTED Key highlights Location Producing fields: Kuito, BBLT, TL Kuito works for development definition after FPSO contract finished Optimization works to lift BBLT production above…
  25. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 25
    BLOCK 14K PRE-DEVELOPMENT STUDIES UNDER WAY Key highlights Location 2 commercial discoveries 3 prospects identified 3 exploration wells drilled 1 appraisal well drilled in 2007 Date of Lianzi Commercial Discovery effective…
  26. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 26
    BLOCK 33 NEW OPERATOR TO BE APPOINTED Key highlights Location 3D seismic survey covering whole block 1 discovery 5 exploration wells drilled Calul Provisional Development Area approved by concessionaire Initial Exploration…
  27. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 27
    SANTOS BASIN (BLOCKS 8, 21, 24) DRILLING CAMPAIGN JUST STARTING Key highlights Location 3 blocks: BM-S-8, BM-S-21 and BM-S-24 3D seismic survey completed More than 10 prospects identified 2 exploration wells being drilled…
  28. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 28
    ESPRITO SANTO POSITIVE SIGNS FROM SEISMIC SURVEY Key highlights Location Galp operator in 5 blocks 3D seismic surveys covering all blocks completed More than 20 leads identified 8 mature prospects ready to be drilled Next…
  29. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 29
    PORTIGUAR BASIN OIL DISCOVERIES UNDER EVALUATION Key highlights Location Galp operator in 20 blocks 2D and 3D seismic surveys completed More than 30 Leads identified More than 12 Prospects identified 10 operated exploration wells…
  30. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 30
    SERGIPE/ ALAGOAS EXPLORATION WORKS IN AN EARLY PHASE Key highlights Location 2D and 3D seismic surveys completed 5 leads identified 2 prospects identified 1 exploration well planned Next steps Finish seismic and geological…
  31. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 31
    ESPRITO SANTO OFFSHORE EXPLORATION WORK JUST BEGINNING Key highlights Location 3D seismic survey 3 leads identified 3D Seismic reprocessing on-going Next steps Finish seismic and geological studies Identify more leads and…
  32. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 32
    POTIGUAR OFFSHORE FIRST EXPLORATION WELL IN 2012 Key highlights Location 3D seismic survey More than 10 leads identified 3D seismic reprocessing on-going Next steps Finish seismic and geological studies Identify more leads…
  33. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 33
    PENICHE NEW FRONTIER AREA Key highlights Location Concession contract signed on May 2007 Exploration Period: 8 years Whole area being new frontier More than 10 leads identified Next steps Geological studies and seismic…
  34. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 34
    ALENTEJO NEW FRONTIER AREA Key highlights Location Concession contract signed on February 2007 Exploration Period: 8 years Whole area is new frontier Seismic and geological studies under way Next steps 3,000 km 2D seismic…
  35. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 35
    MORE THAN 12 LEADS ALREADY IDENTIFIED Key highlights Location Farm-in Agreement signed in 2007 Exploration period: 3+2+2 years More than 12 leads identified Intensive 2007/2008 seismic acquisition program on-going (more than…
  36. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 36
    AN UNEXPLOITED AREA Key highlights Location New frontier area Exploration period: 4+2+2 years Production period: 30 years 1 main lead identified Geological studies under way Area: 17,000 km2 Water depths: up to 2,600 m…
  37. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 37
    REFINING, SUPPLY AND LOGISTICS Lisbon, 22 October 2007 Marques Gonalves
  38. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 38
    STRONG POSITION IN IBERIA Refining and Logistics Infrastructure Key Highlights 100% of Portuguese or 20% of Iberian refining Corua Somorrostro (220 kbpd) capacity (120 kbpd) 69% of production corresponds to gasoline (25%) and…
  39. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 39
    SINES IS ONE OF THE MOST RECENT REFINERIES IN EUROPE Asset Description Sines refinery diagram Sines (1979), includes the following units: Topping 2 vacuum distillation Fluid catalytic cracking Visbreaker 2 diesel…
  40. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 40
    A SPECIALITIES REFINERY IN PORTO Asset Description Porto refinery diagram The Porto refinery complex, built in 1969, includes: Hydroskimming fuel plant Aromatics plant Base oil plant Lubricants blending plant Producer of…
  41. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 41
    ENHANCING VALUE OPPORTUNITY FROM EXISTING PORTFOLIO Rationale Strengths Refining margin target (Usd/bbl) +65% 8.9 Market conditions Integrated refining favour diesel vs fuel and marketing operations +3.5 Dieselization of…
  42. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 42
    POTENTIAL EFFICIENCY GAINS IN REFINERY OPERATIONS Sines Refinery Porto Refinery Maintenance Personnel cost efficiency efficiency Personnel, Maintenance, work hr/1000 Usd/EDC EDC Refining margin Maintenance, improvement…
  43. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 43
    OPTIMIZING REFINING SYSTEM 9 Pre-Flash 6.9 7.9 9 Vacuum distillation 9 Visbreaker Porto 9 Vacuum Flash 9 Starting operations: 2010 Naphtha and fuel VGO Fully oil integrated 9 Hydrocracker refining system 9 Vacuum…
  44. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 44
    TOWARDS ONE REFINING SYSTEM LPG LPG Gasoline focus Naphtha Gasoline T KERO FCC LCO+SLURRY O CRUDE P LPG P I Diesel N G VGO Diesel focus Naphtha HDC VGO Sines Diesel AR Vac. Vac. HGO HGO Dist. Dist. Res. oils…
  45. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 45
    IMPROVING REFINING PORTFOLIO COMPETITIVENESS Product Yield (M ton; %) Crude Processed (M bbl; %) 13.6 14.8 98.5 109.7 11% 11% Others Heavy/Medium 25% 19% Gasoline 59% Light Middle Distillates 75% Fuel 44% 57% 41% 20%…
  46. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 46
    REFININGS EBITDA FUELLED BY CONVERSION AND OTHER UPGRADING INVESTMENTS Conversion Economics Perfomance Improvement Economics Estimated Capex 1,000 M Estimated Capex Starting Cogeneration plants 1502 M operations Energy…
  47. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 47
    EXTRACTING FURTHER VALUE FROM EXISTING ASSETS Impact on Gross Margin (M Usd) 100 345 2 Current Refining margin Volume effect Total 1 effect 1 Assuming refining margin increment of 3.5 Usd/bbl times 98.5 M bbl. 2…
  48. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 48
    OIL MARKETING Lisbon, 22 October 2007 Joo Pedro Brito
  49. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 49
    GALP FOCUSING IN IBERIA 2006 Sales to final clients (M ton) Market Portugal Share 1.7 9.0 Spain 0.4 3.6% 4.4 46% 2.5 Retail Wholesale LPG Special Clients Total Space to grow in the Spanish market 50 Investor Day
  50. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 50
    INCREASE RETAIL ACTIVITY EFFICIENCY AND EFFECTIVENESS Business Overview Key areas GALICIA 1,041 service stations: 818 in Portugal and 5.5% CASTILLA-LEN 223 in Spain 1.5% ARAGN 0.8% CATALUA 2.9% In the past 3 years there was…
  51. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 51
    WHOLESALE AS A RELEVANT DISTRIBUTOR OF REFINING THROUGHPUT Business Overview Main business segments clients 2006 Transports Manufacturing 52% market share in Portugal 615 741 Represents over 32% Resellers Aviation 772 168 of…
  52. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 52
    AN INNOVATIVE APPROACH TO A MATURE LPG MARKET Business Overview Stable market share in Portugal of 44% Deliveries consistently high levels of profitability Over 20 thousand points of sale Market to stabilize at current levels…
  53. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 53
    VOLUME GROWTH IMPACTED BY GDP EVOLUTION Sales Volume (%) Sales Volume (%) 140% 140% Diesel 120% 120% Total Diesel 100% 100% Total 80% 80% Gasoline Gasoline Portugal 60% 60% Spain 2000 2001 2002 2003 2004 2005…
  54. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 54
    EXTRACTING AND EXPANDING VALUE IN IBERIA Rationale Strengths Galp Iberian Market (M ton) Sustain market Long position in leadership in Portugal refining Extract further value Strong brand from existing assets awareness 13.6…
  55. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 55
    A MORE EFFICIENT AND EFFECTIVE RETAIL ACTIVITY IN PORTUGAL Galp Sales Volume (M ton) 37% 37% 37% Strong market share of 37% 2.1 2.0 2.0 Increase penetration of premium products, from 7% to 15% More than 120 million transactions…
  56. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 56
    DELIVERING ON SPANISH STRATEGY Sales Volume (M ton) Galp market share Boosting Galp presence in Spain 7% 5.3 Market share in Spain increased to 7% 2% 3% 4% No geographic overlapping 1.7 2.5 2.7 Increasing refining and…
  57. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 57
    HIGHLY COMPLEMENTARY RETAIL NETWORK Galp Current Galp + AGIP GIJON ASTRIAS CANTABRIA PAIS BASCO GALICIA 10.5% GALICIA 3.5% 3.0% NAVARRA 5.5% 5.5% CASTILLA-LEN 7.3% CASTILLA- LA RIOJA ARAGN CATALUA LEN ARAGN 1.0% CATALUA 1.5%…
  58. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 58
    GEOGRAPHICAL DIVERSIFICATION ACHIEVED Sales Galp + AGIP (M ton) Breakdown Portugal 11.6 by Country 1.7 Spain 0.4 5.9 45% 3.6 55% Retail Wholesale LPG Special Clients Total 12% Iberian market share 59 Investor…
  59. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 59
    FURTHER INTEGRATION TO REDUCE RISK ENHANCES VALUE Sales volumes (M ton) 13.6 13.6 11.6 +2.0 9.0 +2.6 100% To hedge 100% of refining throughput Galp 85% Energia needs to get 66% additional 2 M ton in Spain while…
  60. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 60
    NATURAL GAS Lisbon, 22 October 2007 Massimo Rivara
  61. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 61
    STRONG COMPETITIVENESS OF EXISTING CONTRACTS Sourcing Contracts Sales volumes (bcm) 4.6 4.2 5.7 bcm secured 4.0 High flexibility Maturity 2020/2026 Option to deliver in any point in Iberia NG supply sources 2006 2004 2005…
  62. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 62
    SEEKING FOR NEW SOURCES Rationale Strengths Iberian market (bcm) 52.4 +40% Strong growth Competitive gas prospects sourcing 37.5 Geographical expansion Strong costumer base into Spain Developing power Defend current market…
  63. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 63
    GUARANTEED ACCESS TO CRITICAL INFRASTRUCTURE Regasification Terminal Regasification Terminal Bilbao Irn Larrau Mugardos Pipeline (In construction) 52% 100% 80% Regasification capacity available for Iberian needs Regasification…
  64. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 64
    GALP STORAGE ASSETS KEY FOR OPPORTUNISTIC TRADING Galp Storage Rationale Location : Carrio Stable return Underground storage capacity: Equivalent to a LNG vessel 1st cavern already in operation (40 Mm3) Ability to exploit trading…
  65. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 65
    STABLE RETURN WITH GROWTH POTENTIAL Infrastructure Liberalization Unbundling of commercialization activities for companies with more than 100 thousand clients Over 800 thousand clients Others will have to present separate…
  66. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 66
    STRONG GROWTH PROSPECTS IN IBERIAN NATURAL GAS MARKET NG Market Portugal (bcm) NG Market Spain (bcm) 7.6 44.8 0.9 CAGR 5% CAGR 11% 33.5 12.4 2.7 10.5 4.0 0.7 18.1 1.5 14.3 4.0 14.3 1.8 8.6 2006 2012E 2006 2012E NG…
  67. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 67
    HIGHER MARGIN VOLUMES KEPT AT GALP Liberalization calendar 10 k m3/y Remaining To be regulated 1 Mm3/y from 1st July 2008 Not Electric regulated 2007 2008E 2009E 2010E Regulated and electric volumes to be…
  68. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 68
    GROWTH COMING FROM OWN CONSUMPTION AND GEOGRAPHICAL EXPANSION Galp Energia NG Sales (bcm) Includes Trading and other liberalized sales +1.6 6.2 from LDCs 0.3 0.6 4.6 LDCs regulated sales 0.6 2.8 0.7 Includes incremental…
  69. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 69
    POWER Lisbon, 22 October 2007 Andr Ribeiro
  70. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 70
    A GAS TO POWER PORTFOLIO 800 1,200 MW CO2 Wind io mitigation t fol o r a p n g opi el CCGT v De CCGT Gas to 160 Power 160 Wind 80 New Cogens Cogen Cogens Special Regime Producers Market 71 Investor Day
  71. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 71
    CCGT PROJECTS WITH SOUND FUNDAMENTALS CCGT load factor and Spanish pool price Projected Installed Capacity (MW) cent/ KWh 63% 7 61% 6 400 50% 52% 46% 47% 5 39% 40% 4 800 3 2 400 1 0 2003 2004 2005 2006 3Q 2010E 4Q…
  72. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 72
    COGENERATION BUSINESS WITH POSITIVE IMPACT ON GALPS VALUE CHAIN Regulation Projected installed capacity (MW) 244 Granted tariff for a period of 15 years 82 Tariff covers avoided costs in - 82 80 Investment in alternative…
  73. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 73
    GALP ENERGIA DELIVERING ON WIND PROJECT Regulation Projected installed capacity (MW) 1 Average regulated tariff of 73.6 /MWh, +144 +8 80 to be adjusted with CPI from start of +76 operations +64 400 +108 Granted tariff for a…
  74. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 74
    MOVING INTO POWER BUSINESS Rationale Strengths Target installed capacity (MW) Value accretive Gas & Efficient gas sourcing Power integrated contracts Hydro approach 1,200 Opportunity to Attractive electricity develop…
  75. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 75
    GAS & POWER APPROACH REDUCES OVERALL BUSINESS RISK Galp Energia planned Natural Gas generation mix Demand (bcm) 160 Cogens 2.1 Additional Galp Energia incremental demand 0.4 1.1 Galp Energia own 800 CCGT consumption 4.0…
  76. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 76
    CALL OPTION PROFILE OF INTEGRATED GAS AND ELECTRICITY APPROACH Additional flexibility gain from CCGT project Gas margin Gas cost Spark spread CCGT project will allow to arbitrage between gas trading and power…
  77. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 77
    PORTFOLIOS COMPETITIVENESS TO BE COMPLEMENTED BY HYDRO Indicative cost structure by generation type (MWh) CCGT and Hydro usage Nuclear Hydro CO2 free Available technologies Gas Coal Fuel Capital O&M Fuel…
  78. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 78
    HYDRO INCREMENTAL CAPACITY IS AN OPPORTUNITY TO DIVERSIFY New hydro capacity to be licensed Project Installed capacity (MW) Production (GWh) Ribeiradio 70 110 Foz Tua 234 340 Frido 163 299 Padroselos 113 102 Gouves 112 153…
  79. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 79
    TO BECOME THE ALTERNATIVE PLAYER IN PORTUGAL 1 SRP 1 SRP Fuel oil Coal CCGT More efficient generation mix than average CCGT Nuclear Hydro Hydro Iberia 2010E Galp target portfolio 1 SRP Special Regime…
  80. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 80
    LOCK IN VALUE IN ELECTRICITY Sales Mix Base Case Sales Mix Target Pending on supply margins evolution Galp electricity Final clients Pool Galp electricity Final clients Pool production production Leverage on oil and…
  81. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 81
    FINANCIAL OVERVIEW Lisbon, 22 October 2007 Francesco Antonietti, CFO
  82. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 82
    GALPS BUSINESSES IN DIFFERENT MOMENTUMS EBITDA IFRS (M) EBITDA Adjusted (M) 1,241 0.5x 958 627 0.5x 587 581 560 481 425 0.4x 320 272 1.0x 118 125 79 80 79 80 E&P R&M G&P Consolidated E&P R&M G&P Consolidated 2006…
  83. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 83
    ADJUSTED EPS INCREASED BY 71% TO 0.34 IFRS Adjusted H106 H107 % Ch. Million H106 H107 % Ch. 6,130 5,894 (3.9%) Sales 6,054 5,890 (3.0%) 615 627 2.0% EBITDA 404 481 19.2% 475 498 4.8% EBIT 264 360 36.4% 19 31 59.4% Income from…
  84. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 84
    CONTROLLED OPERATING COSTS External Supplies & Services 2006 (M) Operating costs1 2006 (M) Variable costs 2006 13 Fixed costs 2006 79 24% 0% 3% 4% 221 208 19 693 130 858 270 347 17 69% 71% 66% E&P R&M G&P Consolidated…
  85. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 85
    CAPITAL EXPENDITURES SUPPORTING GROWTH Breakdown by segment: M Maintenance (%) Expansion (%) Total Capex Comments Maintenance and environmental investments in both refineries, 70 construction of new service stations in R&M1) 50…
  86. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 86
    LOW DEBT LEVEL AT 0.4x DEBT TO EQUITY 30 June 2007 M Short Term Long Term Debt exposure to interest rates Fixed rate Bonds - 226 25% Bank debt 325 273 Variable rate 75% Commercial 275 - Paper Debt reimbursement plan…
  87. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 87
    STRONG CASH FLOW GENERATION FROM OPERATING ACTIVITIES ALLOWED DEBT REDUCTION M 1,192 38 918 319 1,280 1,606 305 Net debt 2005 Operating cash Investment Dividends paid Net interests Others Net debt flow cash flow net…
  88. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 88
    OFF BALANCE SHEET RESPONSABILITIES Total responsibilities Coverage Type of benefits 2006 Pension Fund: 370 M Pensions 397 M (95% funded) Pre and early Provisions: 213 M retirements 81 M Accumulated deviation1: 106 M 64 M…
  89. OCTOBER 2007 INVESTOR DAY – Galp Energia – slide 89
    STABLE AND CLEAR DIVIDEND POLICY Annual Dividend of year n Net income IFRS 50% payout replacement x ratio Annual Dividend cost 2006 dividend of 0.304 /share (paid in June 19, Interim Dividend of year n+1 2007) Annual…

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