Press Release: State aid: Commission opens in-depth investigation into Portuguese regional investment aid for Petrogal

The European Commission has opened a formal investigation under EC Treaty state aid rules into an aid worth some €160 million for an investment project of the Portuguese energy company Petrogal in its existing refineries in Sines and Matosinhos. Portugal intends to subsidise the modernisation and integration of the two sole refineries in Portugal, mainly aiming at increasing the production of diesel to the detriment of fuel oil production. The investment will also increase the production of naphtha. After a preliminary investigation, the Commission has doubts as to the compatibility of the aid measure with the state aid rules, in particular regarding the incentive effect of the aid and the high market share of the beneficiary on the Portuguese market. Moreover, issues regarding the geographic and product market definition need to be clarified. The opening of a formal investigation gives interested third parties the possibility to comment on the proposed measure. Opening of an in-depth investigation does not prejudge the outcome of the procedure.