Galp Confirms Light Oil Discovery Offshore Namibia

Galp Energia has confirmed the discovery of a “significant column of light oil in reservoir-bearing sands of high quality” in the Mopane-1X well in block PEL83, offshore Namibia.

Galp, the operator of the asset with an 80 percent stake, and partners NAMCOR and Custos, with a 10 percent stake each, initiated the drilling campaign in PEL 83 in November 2023.

Galp will continue to analyze the acquired data and anticipates performing a drill stem test in the coming weeks to assess the commerciality of the discovery, the Lisbon-based company said in a statement Wednesday.

Drilling operations at Mopane-1X will proceed to explore deeper targets, Galp said. Upon completion, the rig will be relocated to the Mopane-2X location to further evaluate the extent of the Mopane discovery, it added.

PEL 83 covers an area of almost 3,861 square miles (10,000 square kilometers) in the Orange Basin, located in the southern part of Namibian waters, close to the border with South Africa.

Namibia’s Potential

Galp’s Namibia discovery follows a similar one made by TotalEnergies SE in February 2022, when it made a significant discovery of light oil with associated gas on the Venus prospect, located in block 2913B in the Orange Basin. The Venus 1-X well encountered approximately 275.6 feet (84 meters) of net oil pay in a good quality Lower Cretaceous reservoir.

TotalEnergies recently announced an agreement to acquire an additional 10.5 percent participating interest in Namibia's block 2913B, which contains the Venus discovery, and an additional 9.39 percent participating interest in block 2912 from Impact Oil and Gas Namibia (Pty) Ltd. The transaction “represents a key step toward the development of Venus by consolidating the partnership and securing financing of all partners which will add value to all stakeholders”, the company said.

The deepwater oil discoveries off the coast of Namibia are generating huge excitement in the industry, according to a piece from Wood Mackenzie’s Upstream Research Director Ian Thom in November 2022. Overall, Namibia has 230,000 square kilometers of licensed acreage, compared to Norway which has less than 100,000, Thom noted. If the forthcoming appraisal and well flow tests meet expectations, Wood Mackenzie believes oil production in Namibia could surpass 500,000 barrels per day within a decade and continue to grow after that, he added.

“And with so few wells drilled in Namibia, we can expect further exploration success and resource upgrades. So far, Namibia is in trend with results achieved from other frontier deepwater hotspots like Guyana, Suriname, and Senegal,” Thom stated.

Recent Earnings

Galp reported RCA EBITDA of EUR 1.06 million for the third quarter of 2023. RCA EBITDA for its Upstream segment was down year over year to EUR 594,000, reflecting the “de-recognition of the Angolan upstream assets’ disposal and a less favorable oil and gas prices environment”, it said in its most recent earnings release.

On a comparable basis, excluding Angolan assets, the company said its current portfolio working interest production was up eight percent year over year, “supported by the ramp-up of Coral Sul FLNG [floating liquefied natural gas] in Mozambique and stable production in Brazil”.

For its Renewables & New Businesses segment, Galp’s RCA EBITDA was EUR 43,000, “on a seasonally high generation quarter”, with increased generation from added operating capacity more than offsetting the lower market price environment year over year, according to the release.

Galp’s RCA net income for the third-quarter of 2023 was EUR 210,000, up 12 percent year over year.

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