Brazil’s state-run oil giant Petrobras (PETR4.SA) is teaming up with at least one partner to bid for a 40% stake in Galp Energia’s (GALP.LS) Mopane oil prospect in Namibia, according to sources familiar with the matter, as reported by Reuters.
Last week, Sylvia dos Anjos, Petrobras’ Director of Exploration and Production, confirmed to Reuters that the company had made a non-binding offer to become the operator of the Mopane block off Namibia’s coast. However, she did not specify the exact share of the 40% stake Petrobras is targeting.
The sources, who requested anonymity, indicated that Petrobras will not pursue the full 40% stake independently. One source emphasized that the competitive bidding process in this highly sought-after area necessitates sharing risks with partners. The exact number of partners or their identities were not disclosed, nor was it confirmed whether Petrobras has already secured a partner.
The move comes as Petrobras seeks to enhance its oil reserves amid difficulties in obtaining environmental licenses for exploration within Brazil. Namibia has emerged as a promising new hub for oil and gas exploration, with several significant discoveries made along its coast in recent years.
Galp Energia aims to divest half of its 80% stake in the Mopane field, which holds estimated reserves of at least 10 billion barrels of oil equivalent. According to BTG Pactual analysts, assuming a 25% oil recovery factor from the block’s reserves, the 40% stake could be valued at approximately $4 billion. The analysts cautioned that this investment, along with potential purchases of two refineries in Brazil, might increase risks associated with Petrobras’ dividend payments.
