Portuguese energy player Galp Energia is to lose its chief executive Andy Brown who has tendered his resignation.
Galp confirmed on Monday that Brown would leave at the end of 2022, after successful completion of the company’s 2019-2022 mandate, part of which was performed under his predecessor Carlos Gomes da Silva.
“During my time as chief executive, I have dedicated myself to deliver our purpose – Let’s Regenerate the Future Together – transforming Galp to a more open, dynamic and profitable company and adapting to the cleaner energies of the future. It’s a path that’s only possible with the extraordinary work carried out by the talented people at Galp and the support of the board of directors,” said Brown.
The end of his relatively short tenure came as a surprise to equity research and intelligence company Redburn. Brown’s executive team has only recently been completed and events, including the aftermath of the Covid pandemic, and midstream gas supply and hedging issues, have had an impact on his time at the company.
“We have been calling for a strategic update this year which now will almost certainly be pushed back into 2023 for the new executive team, but new management will at least provide a catalyst for a refresh,” said Redburn in a research note.
“Our guidance from Galp for now is that the board is happy overall with the current strategy and the new chief executive’s mandate will be for ‘fine tuning’ rather than a full revamp.”
Galp is transitioning from being an upstream player into an energy company with an increasing focus on renewables.
The Lisbon-headquartered company is targeting 1.4 gigawatts of installed renewable energy capacity by the end of the year which will account for more than 25% of its net capital expenditure through 2025.
However, Ebidta shows that Galp predominantly remains an upstream company, noted Redburn.
“Galp’s exposure to high-quality upstream growth assets in the Brazilian pre-salt had benefitted its valuation in previous years, but with the excess growth story now largely told and increasingly dependent on a Mozambique development whose onshore element remains uncertain, the differentiation it provides has eroded.”
In a note published via the Portuguese Securities Markets Commission (CMVM), Galp said it expects to name a new chief executive before the end of the year.
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