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Portugal will use all available tools to protect refining capacity during the Galp-Moeve merger

Luis Montenegro, Portugal's Prime Minister, said that the government was monitoring merger talks between the?Portuguese Oil Company Galp and Spain’s Moeve. The government will use every tool available to protect Portugal's strategic refining capability.

Moeve and Galp began talks in January to create two joint ventures - one that would operate 3,500 fuel stations in the Iberian Peninsula and another that would combine Galp's refineries?in southern Sines with Moeve refineries in southwest Spain's Huelva & Algeciras.

Moeve will hold the majority of?the refining company, one of Europe's largest, while Galp will retain just over 20%.

Montenegro announced late on Tuesday that the government has been closely monitoring negotiations "from the first day to safeguard Portugal's refinery capacity". They described it as an issue of sovereignty, strategic security and energy.

He told the parliament that "we will not refrain from?using?the full range of action available to government as a shareholder, and through its regulatory authority."

Portugal, which has had a law in place since 2014, to protect strategic assets, including those in energy, and the state owns approximately 8.4% of Galp, is the only country that did not specify what tools it could use.

Even though the government has no direct veto, it can use its leverage to seek assurances about the future of the refinery, which is the only one in the country.

(source: Reuters)