Supermajors vie for stake in Galp's huge Mopane oil find off Namibia

The world’s biggest upstream players are squaring up for a stake in Galp’s massive Mopane discovery in Namibia’s Orange Basin, thought to be the biggest find to date in the industry’s most exciting exploration frontier.

According to estimates from the Portuguese energy firm, the Mopane find -- located in the PEL 83 license off the western coast of Namibia -- could hold up to 10 billion barrels of oil equivalent in place, sparking a rush by IOCs for a share of the spoils.

Galp holds an 80% stake in the development, alongside state-owned Namcor and Namibia-based Custos with 10% each. Toronto-based explorer Sintana Energy, which boasts acreage across the Namibian offshore, holds a 49% interest in Custos.

The Portuguese company is willing to farm out up to half its stake, which would leave it with 40% of Mopane, but not before drilling a further four wells on the license in the fourth quarter of 2024, its CEO Filipe Silva said in July, adding that he was in no “rush” to de-risk the find.

Any potential partner would be one that is keen to develop the field quickly and contribute capital expenditure, Silva said, adding that Galp expects to have a partner in place “later in 2025”.

Nevertheless, potential suitors are already lining up for a stake in the project and Galp has opened the bidding process, according to reports.

Galp declined to comment in response to a list of questions about the potential farmout.

However, a source familiar with the matter told S&P Global Commodity Insights, on condition of anonymity due to the sensitivity of the situation, that there has been “a tremendous degree of interest including from the supermajors”.

“Given the opportunity for a significant stake and operatorship of a world scale discovery they are a natural constituency that has responded with interest,” the source said.

In late September, Sylvia dos Anjos, exploration and production director of Brazilian oil and gas giant Petrobras, said the state-run company would seek the entire 40% stake in Mopane.

"Operating with less than 40% is very bad... [Galp] offered the operation, and no one operates with less than 40%," Anjos told journalists on the sidelines of an oil and gas conference in Rio de Janeiro, adding that there had been “no progress” on a potential deal.

Petrobras has been looking to expand into Southwest Africa to grow its global presence and leverage its deepwater experience, having picked up exploration stakes in Sao Tome and Principe and South Africa. "We know Brazil very well, we also know Africa very well. So, naturally, if we go somewhere abroad, Africa is a good place," Anjos said.

However, as many as a dozen other firms are understood to have expressed an interest in the Mopane stake, including US energy supermajor Chevron, France’s TotalEnergies, Australia’s Woodside and Anglo-Dutch giant Shell.

Chevron, TotalEnergies and Shell refused to comment on whether they were interested in farming into Mopane.

A Woodside spokesperson said the company does not “comment on market speculation” but added: “In Woodside’s normal course of business, it continuously reviews its portfolio to optimize value.”

Representatives for the Namibian oil ministry could not be reached for comment.

Commercially viable

Mopane lies in Blocks 2813A and 2814B -- collectively Petroleum Exploration License 83 -- in the Orange Sub-basin. The field stretches 535 sq km and has water depths of up to 1,680 meters, according to data from Commodity Insights.

Galp has drilled two wells -- Mopane-1X and Mopane-2X -- both of which have discovered “significant columns” of light oil in high-quality reservoir sands, while also confirming a lateral extension, as the wells were drilled 8 km apart.

On April 21, the company announced that the Mopane find was likely to be commercially viable. According to Commodity Insights estimates, the Mopane field will see first oil in 2030 and will plateau at 211,000 boe/d in 2037.

The find sits to the north of the giant Venus and Graff discoveries by TotalEnergies and Shell respectively in early 2022, which sparked a rush for stakes in the Orange Basin from the world’s biggest exploration and production firms.

The Venus find, which could hold as much as 5 billion barrels of oil in place, according to the Namibian government, is expected to be the first oil project to come online in 2030, according to forecasts from Commodity Insights analysts.

TotalEnergies is planning for a 160,000 b/d development on Venus, CEO Patrick Pouyanne told analysts on Oct. 2, while also drilling other prospects in its Orange Basin acreage.

Commodity Insights forecasts suggest Namibian crude production from Venus, Jonker and Graff will reach 380,000 b/d by 2035, increasing further with additional discoveries.

That would make Namibia -- which does not currently produce any hydrocarbons -- a major African oil producer, transforming its economy.