Galp is an integrated energy company with simple goals: keep houses warm and lit, cars and trucks on the move, and businesses running smoothly. If someone turns on a light, takes a bus, or has dinner with friends, the company’s mission has been accomplished. Its vision, however, extends well beyond maintaining today’s daily comforts. This future focused company has a clear road map in place to develop sustainable businesses and achieve net-zero emissions by 2050.
In 2021, Galp updated its strategy towards a resilient investment case in an accelerated energy transition. Galp aims to reshape its portfolio and become a dynamic, digitally enabled customer-oriented company, with a material position in renewables and new energies, and industrial operations being progressively decarbonized and transformed towards a green energy hub.
Until 2025, about 50% of its net investments are aimed at capturing opportunities from the energy transition of which 35% will be allocated to renewable power generation and new businesses.
By 2030, the company is aiming to reduce absolute emissions (scope 1 and 2) by 40% and carbon intensity emissions (scope 1, 2 and 3) by 40% in production and by 20% in downstream sales. The goal for 2050 is net-zero emissions in scope 1, 2 and 3.
Shaping the future
“Energy is a technology intense, highly complex business,” said Catarina Ceitil, Head of Business Transformation, Galp Energia SA, at the recent SAP Conference for Energy in Amsterdam. “There is still a high demand for oil, so we must maintain our legacy industry which provides the cash for investing in the transition to our non-oil businesses.”
Creating the best possible energy mix for the future involves combining the most advanced technology with its production processes to generate more value and increase efficiency. Innovation is part of the Portuguese company’s DNA. Its history spans three centuries, beginning in 1846 when gas lighting was introduced in Lisbon. Over the decades, technical, economic, and social changes contributed to the switch from gas to oil and now to natural gas as the energy sector evolved in Europe and beyond. Today, the company operates around the globe and is involved in a myriad of technology, innovation, and research projects.
Galp utilizes the best reporting standards and guidelines for fostering transparency in its relationship with stakeholders. Galp's carbon footprint is calculated on an annual basis using the methodological framework established by The Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard, supplemented by the relevant industry norms.
The company is a top performer in environmental, social, and governance (ESG) metrics. In its goal to combine its strong environmental performance with industry leading cost competitiveness, Galp evaluates biodiversity and water risks every year. The company conducted human rights assessment in more than 90% of its operations in the past three years, including ESG criteria in 100% of all purchases.
Galp is a part of Bloomberg Gender Equality Index and is working on an accelerated convergence to gender parity until 2030. Its good practices are recognized by several ESG indexes, the company leads the Dow Jones Sustainability Index in Europe in its sector and was also awarded a gold medal in the 2022 edition of the Sustainability Yearbook. The results disclosed by S&P Global indicate that Galp achieved the best records in the environmental and social areas, representing the highest values obtained among peers in the Oil&Gas Upstream & Integrated industry.
Maintaining the balance
Galp’s future business prospects include solar parks in Brazil and a joint venture with Northvolt to develop opportunities in the battery value chain including Europe’s largest, most sustainable lithium conversion plant to be located in Portugal. Galp is also testing the waters of green hydrogen production as part of GreenH2Atlantic, a consortium of 13 companies and research partners selected by the European Commission as part of the Green Deal to develop a green hydrogen production at 100 MW scale in Sines, Portugal.
Green hydrogen is expected to become one of the pillars of economic growth, for it is a decisive energy vector in the decarbonization process for the main sectors of the economy. This project will enable the transition of a former coal-fired power plant into an innovative renewable hydrogen production hub in alignment with Europe’s decarbonization and energy transition strategies.
Galp relies on SAP solutions to maintain the necessary balance between its legacy industry and the new businesses during the transitional period.
SAP technology is a key enabler for such a massive, comprehensive transition.
“ The SAP ERP applications have kept Galp’s business running for 25 years, and now SAP S/4HANA is connecting and balancing the two worlds,” said Ceitil. “Back in 1990s, the goal was to customize. There were no miracle solutions that didn’t need to be adapted. Today, we standardize in order to optimize. We’re focused on adopting standard, ready-to-use solutions that meet our specific needs.”
The company’s needs are centered on its new business model that reflects the consumption patterns of an open, digital, and sharing economy. One strategic decision was the integration of all business-to-business and business-to-consumer segments into one business unit, commercial, which comprises all oil products, gas, electricity, nonfuel, and services.
“This approach helps us better assess the needs of our customers and deliver fit-for-purpose solutions for businesses and customers in all the geographies where we operate,” Ceitil said. “SAP S/4HANA provides the foundation for a customer-centric business model that can increase satisfaction, strengthen long-term relationships, and sharpen competitiveness.”
With its technology needs being met, Galp is confident it will succeed in its ongoing transformation journey and thrive throughout the energy transition and beyond. Regulatory impositions, technological developments, and the decreasing costs of low-carbon options are driving society towards a cleaner future. Galp is not just following the trend – it is leading the way.
Find out how SAP is helping oil and gas companies with their renewable energy transition.
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