General Thoughts, page-5026

It really is fun speculating on how all this is going to unfold. Regarding who will partner with Galp in PEL 83, I think there are three major contenders: ExxonMobil would love to get in and remobilize all their contractors and crews from Guyana to Namibia. They can commercialize Mopane more quickly than anyone, and as I recall, Galp has worked with them offshore Namibia before in the Walvis basin. But ExxonMobil may be low-balling Galp, not only because they can commercialize Mopane more quickly, but also because I think they might already have an informal MOU with Woodside for PEL 87 (more on that below). The fact that Galp is moving forward with exploration indicates to me that they aren't happy enough with the first round of offers to find any of them acceptable. Another major that is likely to be seriously vying to partner with Galp is Shell. Their discoveries in PEL 39 are paltry in comparison with Mopane, but become more commercially viable for them if Shell can commercialize Mopane. If it came down to a bidding war between them and ExxonMobil, the latter could easily win, but they may bow out and let Shell outbid them depending on their confidence in partnering up with Woodside (this is where I see the Seismic Licence coming into play, as their confidence in the prospectivity of PEL 87 will rest upon them having access to that 3D data volume). Ideally, I think ExxonMobil has their eyes on both PEL 83 and 87, but if they have to settle for just one, I think they will go with PEL 87 with the Saturn superfan being what I think will quite likely prove to be the jewel in the crown for offshore Namibia. But then there is Petrobras, and their indication that they want to partner up with another company in making their bid for Mopane. Who might that be? I think the odds favour Azule, which has already partnered up with Rhino in PEL 85. Azule is a joint venture between BP and Eni headquartered out of Angola, a former Portuguese colony. If ExxonMobil and Shell aren't willing to pony up enough mula, Galp could go with Petrobras and Azule, especially if Mopane extends significantly into PEL 85. I don't think Chevron is a serious contender, given they are focusing on PEL 90, and now, also, PEL 79 in the Walvis Basin, not to mention Hess in Guyana. Of course, partnering with Galp would seriously derisk their other prospects.

Okay, so where does all that leave, Pancontinental, Woodside and PEL 87?