non binding price offers for Mopane by 30 June 2025 could give us a mortgageable price for Saturn as well, after a first successfull exploration well.
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Those interested in becoming Galp'spartnersin the Portuguese company's Potosí oil sector in Africa have this entire month to present their credentials.Maria João Carioca , the energy company's co-CEO, confirmed this during her speech at theRBC Capital MarketsGlobal Energy, Power & Infrastructure Conference.
Rio de Janeiro announced that Galp has encouraged interested parties to submit non-binding offers by June 30.The Portuguese giant is currently in the process of potentially selling half of its 80% stake in its Mopane field (Namibia), where it revealed several exploration wells have been successfully drilled.
Estimates say the deposit discovered by Galp in the African country contains more than10 billion barrels of oil equivalentin situresources, so this is no small matter.
A 'BLACK GOLD' MINE IN THE AFRICAN DESERT
Carioca affirmed that, for the time being, data exchanges and technical analyses are continuing, and noted that Galp is holding discussions with a shortlist of credible potential partners, both national oil companies (NOCs) and international oil companies (IOCs). The board expressed confidence that the concurrence of bids will generate sufficient competitive pressure.
Since the discoveries are spread across two hubs,Galp indicated that potential buyers are immersed in technical analysis of the different areas, in order to understand the differences between them. For now, Carioca indicated, thesoutheasternhub appears to be the richest in oil.
Galp, however, observes good levels of permeability and porosity in bothhubs. According to RBC Markets, more optimistic comments are emerging from operators in the region, leading the financial institution to continue to anticipate strong interest in this partialfarm-downtransaction.
GALP NEEDS AN INVESTOR, AND IT NEEDS IT NOW
Paradoxically, finding apartnerto participate in such a wealth deposit has become a real headache for Galp. The slowness of the process has even earned it the occasional slap on the wrist from analysts.
In early May,Berenberg criticized the company for its lack of progress in this endeavor, emphasizing the importance of properly prioritizing the development of the field: "Confirmation of a development concept and/or the addition of a strategic partner would clearly de-risk this approach and be a positive catalyst for the stock, in our view."
"Our conversations with investors reflect some frustration with Galp's lack of progress in bringing on a strategic partner (farm-in), while the proportion of gas in the field remains a key issue," the analysis noted.
The German financial company added further pressure by recalling that Galp's current valuation "reflects, very conservatively, a complete write-off of the Namibian project, which is not in line with the company's positive comments on recent drilling results or the potential for reaching an agreement before the end of the year."
The magnitude of the Mopane discovery in Namibia, Berenberg emphasized, has the potential to generate "significant value" for Galp. However, to unlock this value, "the company must confirm its commercial viability," he added. The main question appears to be how the presence of gas will affectinvestment (capex) and operating (opex) costs .
