Galp refining margin jumps to $33.8 as Moeve deal stalls
Key Facts
Galp and Moeve ended talks on October 26 to combine their downstream operations without an agreement, after failing to reach suitable final commercial terms. The discussions were based on a non-binding agreement announced on January 8, 2026. Their suspension came as Galp reported a refining margin of $33.8 per barrel in the third quarter, compared with $16.8 in the second quarter and $9.5 a year earlier. Galp Chairwoman Paula Amorim said the parties had not achieved "the commercial alignment needed to support a sustainable partnership that creates value." She added that the strategic rationale for the deal remained compelling from the company’s perspective.
The proposed project would have combined the companies’ downstream operations in an industrial platform and a retail platform. Galp expected to retain a minority stake of more than 20% in the industrial venture. The retail platform was planned to be under joint control, with balanced stakes. The agreement announced in January was non-binding, and the companies did not disclose a specific reason for ending the talks. They said only that they had failed to reach suitable final commercial terms, according to Galp’s announcement.
Reuters cited a source familiar with the matter as saying that energy market volatility driven by the war had made it harder to agree on refinery valuations, and that there was no intention to resume talks in the medium term. The source linked fuel supply disruptions to higher refined product prices relative to crude oil and to an increase in refining margins globally. This comes as Galp’s refining margin rose to $33.8 per barrel from $16.8 in the previous quarter. Neither company officially attributed the end of the talks to market volatility or refinery valuations. The outcome leaves each company’s downstream assets in its own portfolio.
Galp’s third-quarter results showed adjusted earnings before interest, taxes, depreciation and amortization on a replacement cost basis of 1.522 billion euros, and adjusted net income of 682 million euros. The industrial and midstream segment posted earnings of 639 million euros, as its refining system benefited from higher international oil product spreads. The upstream segment also reported adjusted earnings of 708 million euros. The company attributed the segment’s performance to higher production in Brazil as output from the Bacalhau project continued to ramp up, alongside higher realized oil and gas prices. Galp said the end of the talks would not affect its existing operations or its confidence in the downstream portfolio’s ability to create value independently.
Galp raised its 2026 annual guidance after strong operating performance in the first nine months and an improved economic outlook for the coming months. The company said the performance had strengthened its confidence in the remainder of the year and supported another guidance increase. It also reaffirmed that its strategic direction and investment thesis were unchanged. Galp will therefore continue to assess its downstream portfolio independently after the proposed partnership stalled. The source familiar with the matter does not expect talks to resume in the medium term.