GALP CEO announces he is stepping down
Outgoing GALP CEO Andy Brown criticised the government's plans to help families through the energy crisis days before announcing he was standing down. Image: LUSA

Nigerian gas supply doubts: GALP describes “significant losses” in acquiring gas from other sources

Statement follows President Marcelo’s oblique criticism

At around 1am this morning, Observador reported that GALP insists that it has already suffered “significant losses” acquiring gas from other sources to make up for Nigerian supply shortfalls.

The assertion followed oblique criticism from President Marcelo yesterday who, even on an official visit to Ireland, has managed to keep commenting on current affairs in Portugal.

Marcelo appeared to be seeking to play down the threat of supply failures from Nigeria, saying that the issue had already been ‘partially solved’.

There is no question of a Nigerian gas cut”, he said. “Nigeria has been a zealous complier(with long-term contracts in place), and intends to be a zealous complier and recover deliveries that have been delayed. The concern is whether this can happen or not, since it has a very large weight in the supply of gas to Portugal”.

In other words, there could indeed be further ‘delays’ but those in power are hoping there won’t be…

The Portuguese government “has taken several steps, and these steps have had a very positive reaction from those responsible, starting with the Nigerian President (Muhammadu Buhari)” Marcelo continued, adding that “by the end of the year, everything will be done to overcome what has happened in terms of some deliveries in the recent past”.

All clear now? Well, no, not really: the president also made some curious remarks that appeared to be directed at GALP. 

“There are other countries, for example, that have shown interest in supplying GALP, and GALP has not shown any interest in this supply”, he said. “GALP’s perspective (that there will be supply shortages) is GALP’s perspective. The perspective of the Portuguese government is the perspective of Portugal”.

It may be relevant to note here that GALP’s CEO Andy Brown announced he was stepping down earlier this month after just two years in the job. His previous job, with Royal Dutch Shell, spanned three decades. Mr Brown accompanied energy secretary João Galamba on the ‘unusual trip’ taken to Nigeria in September ‘to secure gas deliveries’, after which a number of news sources suggested the situation was not exactly as it seemed.

Indeed, even Mr Brown criticised the government’s tactics of advising citizens to ‘switch to the regulated market in order to save money’, saying it was “not efficient and would not benefit those who need it”.

For now, GALP stresses that it is “monitoring developments in Nigeria: it continues to be unclear when operations in the country will be restored and whether the impacts of the floods will result in additional ruptures of supply for GALP”.

To recap, on Monday Nigeria declared a shut down of gas production due to flooding in the country that has affected all supply operations. GALP then informed CMVM (securities and markets commission) of a “substantial reduction” in gas likely to be coming through, due to ‘force majeure’ – when force majeure is declared, any ‘compensation clauses’ fall: Nigeria will not be liable for make up for contractual failings. Ever since, the government (and now the President of the Republic) has been saying ‘rubbish’.

natasha.donn@portugalresident.com