During a conference call with journalists, João Marques da Silva, one of the co-CEOs of the group, stated that “this type of project is developed in consortium,” indicating it’s not “usual for Galp to have an 80% exposure.”
For the executive, “it doesn’t make sense for Galp to have this type of exposure,” emphasizing the importance of having “a credible partner” in exploring this asset.
Galp today announced a partnership with TotalEnergies for the exchange of a 40% interest in the PEL 83 area in Namibia for two other areas operated by the French multinational, which will take over operations of this license.
“In exchange for a 40% stake in PEL 83, Galp will acquire a 10% stake in PEL 56, where the Venus discovery is located, and a 9.4% stake in PEL 91, both operated by TotalEnergies,” stated a press release issued by the Portuguese oil company.
The statement noted that Galp chose TotalEnergies as a partner to “jointly operate and develop the Mopane discovery through an asset swap.”
With this exchange, Galp relinquishes half of its stake in Petroleum Exploration License No. 83 (PEL 83).
The co-CEOs of Galp believe this partnership is logical for the company, considering much work remains in Mopane, while Venus is several years more advanced, potentially ready for production by 2030.
Co-CEO Maria João Carioca explained that under the financing agreement, Total will assume 50% of the initial development costs of Mopane, to be reimbursed only upon the commencement of oil production from the asset, allowing for a “significant reduction” in Galp’s exposure.
When asked about the impact of this partnership on Galp’s shares, which closed with a drop of over 14% on the Lisbon stock exchange today, Maria João Carioca acknowledged that short-term investors might expect a “faster cash return,” but expressed confidence that the situation will stabilize as investors “take a closer look” at the business information.
Regarding the disclosure of the agreement while the market was open, the co-CEO noted concerns about potential “information leaks.”
The co-CEOs did not disclose a specific value for the deal.
