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* Fossil fuel companies shifting to renewables
* Forty percent of capital expenditure for energy transition
* Share price eases
(Adds company results, shares, detail)
By Catarina Demony and Sergio Goncalves
LISBON, Feb 18 (Reuters) - Portuguese oil company Galp
Energia said on Tuesday it will kick off its green
business by installing renewable energy capacity of 10 gigawatts
in the decade ahead, enough to power millions of homes.
Galp, which last month bought solar power projects from
Spain's ACS for 2.2 billion euros ($2.38 billion),
hopes to install 3.3 gigawatts of solar energy in Portugal and
Spain alone by 2023, generating more than 10% in equity returns.
Fossil fuel companies are racing to adapt to
investor-demands for more sustainable business models as public
awareness of climate change grows.
Galp sees itself as well-placed to "build a competitive
renewable business" from its location on the Iberian peninsula
with its 1,800 solar hours annually.
From this year onwards, it said that more than 40% of Galp's
capital expenditure, between 1 billion to 1.2 billion euros,
will be spent on the energy transition, which includes renewable
energy and a natural gas project in Mozambique.
Galp is the largest oil and gas group in Portugal, where it
distributes gas and sells petrol.
Traditionally an oil refinery, Galp attracted interest from
investors due to its growth prospects in oil and gas production
in projects in Angola, Mozambique and Brazil, where China's
Sinopec has 30% of its assets.
'GROWTH TRAJECTORY'
Globally, it competes with majors such as Royal Dutch Shell
, BP, Total and Exxon.
BP last week set one of the oil sector's most ambitious
targets for curbing emissions, although some environmental
campaigners accused it of greenwash and said it had not given
enough detail on how it would achieve its targets.
Galp also announced on Tuesday morning its adjusted net
profit rose by 44% in the fourth quarter of 2019, compared to
the same period in 2018, boosted by the operational performance
of oil exploration and production, despite an 8% drop in oil
prices.
However, its adjusted net profit in 2019 as a whole fell 21%
to 560 million euros compared to the year before as a result of
weaker refining margins.
The oil firm posted earnings before interest, taxes,
depreciation, and amortisation of 653 million euros between
October and December 2019, a 32% jump compared to same period in
2018.
It added the firm's "growth trajectory" should lead its cash
flow from operating activities (CFFO) to surpass the 3 billion
euros mark from 2025 onwards, against 1.9 billion euros in 2019,
while the upstream CFFO is expected to exceed 2 billion euros.
Galp's shares weakened following Tuesday's results and by
1036 GMT, were around 1% lower, eroding the previous session's
gains.
($1 = 0.9234 euros)
(Reporting by Catarina Demony and Sergio Goncalves; Editing by
Barbara Lewis)
