Galp cuts 5-year spending forecast

Brazil-focused Galp Energia has shaved 15% off its five-year investment forecast as it braces for a sustained oil price downturn.

Average annual capex has been revised down to 1bn-1.2bn euros for the 2016-20 period, the Portuguese firm said in an investor presentation on Tuesday.

Galp said it would outlay 1.1bn-1.3bn euros this year, compared to 1.24bn euros in 2015.

Brent crude, the most widely used global oil benchmark, has shed about two thirds of its value since a June 2014 peak of US$114/b amid fears of oversupply and weak demand.

The decline has dented company profits and threatened the viability of new projects.

Most of Galp's exploration and production investment will be pumped into Brazil, where it has 27 upstream projects out of a global tally of 45.

The company expects two floating production, storage and offloading (FPSO) units to enter production this year, adding a combined 300,000b/d of capacity at the Lula Alto and Lula Central developments in Brazil's Santos basin.

Another five offshore production systems will be added in Brazil in 2017 and 2018.

Despite reduced refining margins, Galp last month reported fourth quarter net income of 149mn euros, up from 137mn a year earlier.

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