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By Andrei Khalip
LISBON, Feb 11 (Reuters) - Portuguese oil company Galpsaid on Monday it expects higher crude output,refining margins and efficiency gains to deliver a steep rise in2020 and beyond as its Brazilian and Angolan operations pump upthe volumes.
While a relative minnow compared with oil majors such asRoyal Dutch Shell, BP, Total and Exxon, Galp is a household name in Portugal, distributing gasand selling petrol via a network of branded service stations.
Traditionally an oil refiner, Galp has attracted interestbecause of its oil and gas production growth prospects fromstakes in projects in Brazil, Angola and Mozambique and China'sSinopec owns a 30 percent in its Brazilian assets.
Galp said its oil output rose 15 percent in 2018 and itexpects a rise of 8-12 percent in 2019 after delays with thestart-up of Brazilian projects, and by 12-16 percent in 2020.
The offshore Iara field is now due to start producing in thesecond half of 2019, its chief executive Carlos Gomes da Silvasaid on a post-earnings conference call, adding that Galp alsoexpects its upstream earnings to benefit from lower oil taxes.
"After 2020, we are assuming a higher production versus theprevious guidance. We expect to benefit from the increasecontributions from Lula and Iara, where we see positive signs,"Gomes da Silva added.
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While Galp's fourth-quarter net profit was below forecasts,falling by 42 percent to 109 million euros, its earnings beforeinterest, tax, depreciation and amortization (EBITDA) rose fourpercent, ending the full year at 2.2 billion euros.
It projected EBITDA of 2.1 to 2.2 billion euros for 2019,but said that this should jump to more than 3 billion euros in2020, with further growth through 2025.
Shares in Galp were up 0.5 percent at 1423 GMT, helped by a15-percent proposed increase in the dividend payout, of 0.63euros a share, traders said.
Analysts at Santander said that despite a weak quarter,affected by mark-to-market hedging losses and scheduled refinerymaintenance, they expected "highly differentiated upwardearnings trend" in the next few years.
"We still reason to be optimistic for sound delivery 2019onward - particularly upstream," they wrote, reinforcing their'buy' recommendation on the stock. "The value support and cashoutlook is bright for Galp in our view."
Galp CFO Filipe Silva said that hedging contracts shouldhave a positive impact in the coming quarters, while inrefining, Galp expects recent initiatives aimed at increasinggains by $1 per barrel to make a full contribution by 2020.
The company also said it hopes to see the first oil from theKaombo South project in Angola this year.(Reporting by Andrei Khalip and Goncalo AlmeidaEditing by Alexander Smith)
