Galp faces State fine of €8 million

Oil company GALP is facing a new State ‘fine’ of €8 million for not having constructed a combined-cycle power station for natural gas in Sines.

The issue goes back to an agreement forged in 2006, in which GALP agreed to the €400 million investment, explains Correio da Manhã today.

Then came “various delays”. GALP appears to have struggled to find investment partners, finally pulling out of the contract altogether in 2013.

Says CM, the government has always been clear that it would trigger the contract’s €8 million compensation clause, but it had been waiting for GALP to pay up voluntarily.

This hasn’t happened: hence the move by the department of energy and geology (DGEG), presented before a judge in Lisbon earlier this month.

This is not the first debt that GALP owes the State. The company already owes millions on profits made on the resale of natural gas (click here), and has reportedly refused to answer media questions on the subject.

Today also CM claims that “the oil company has refused to make any commentary on the action taken by DGEG”.

Meantime, the issue over whether or not GALP will go ahead with oil and gas drilling off the coast of Aljezur, in the so-called Alentejo Basin, has been further confused by the ‘acceptance’ of a new legal bid contesting the validity of the company’s licence, lodged by anti-oil platform PALP.

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