The CEO of the oil company revealed to analysts that “the capital necessary to invest in developing the Namibian project will be financed by our new partner,” without clarifying whether this partnership has already been decided or not and without mentioning the names of the companies.
The CEO of Galp confirmed, today, Tuesday, in a phone conversation with analysts, following the presentation of the results of the first quarter of 2024, that Galp “will retain a significant stake” in the ongoing oil exploration project in the Mopane areaOff the coast of Namibia. After completing the first phase of exploration at the site, the oil company will now continue carrying out work on the ground, with four more holes planned, keeping in mind that “there are other areas with potential in that area.”
Felipe Silva also added that future Namibian oil revenues should not be absorbed by the company's investments in that geography, but rather Allowing Galp to finance its eventual transformation and “accelerate ongoing energy transformation projects”such as decarbonization of the Sense refinery, and the production of low-carbon fuels, hydrogen and lithium.
Hey The official did not confirm the already announced news that the oil company intends to sell half (40%) of the 80% majority stake it holds in the consortium., which also includes Namibian state-owned Namcor (10%) and Custos Energy (10%). However, Felipe Silva confirmed this to analysts “The capital needed to invest in the development of the Namibia project will be financed by our new partner.”Which should happen “at the end of 2024, beginning of 2025.” The CEO did not reveal whether this partnership has already been determined or not, without mentioning the names of the companies. Regarding the possible entry into production, he spoke of “the end of the decade,” saying that “it is still too early to make predictions.”
“The investment in drilling the two wells was lower than we expected. Currently, the 'Capex' requirements are light It is not expected that future financing will be provided by Galp. Therefore, we will reduce our participation from 80% to a lower percentage.”He said.
As for the estimated reserves of 10 billion barrels of oil equivalent in the region, the official said that these are the best expectations based on the information collected so far from the two wells already drilled. We are a conservative company and we will calibrate the commercial model based on what we have already been able to prove. Are there risks? That's why we will conduct further exploration to better analyze the Mopan area, revealing that the oil company deliberately chose not to carry out the first drilling operations in places with the greatest potential (the so-called “good sites”, as the CEO told analysts). The two wells that have already been drilled, where Galeb announced the discovery of oil, are located 8 kilometers apart, and the company acknowledges the possibility of making a “possible connection” between them. Regarding investment in this exploratory phase, Galp already allocated 117 million euros last year and plans to spend another 150 million this year.
The CEO did not specify the main obstacles or challenges in the Jalab oil project for Namibia, saying that it is a project “An incredibly stable country” with cooperative authorities. “We are satisfied with the country as a whole”Felipe Silva concluded.
Galp closed the first quarter of this year with Adjusted replacement cost (RCA) profit of €337 million, an increase of 35% compared to €250 million earned in the same period in 2023.On Tuesday, the company led by Felipe Silva indicated in a statement to the CMVM. Turnover fell by 1% to €5,075 million, while earnings before interest, taxes, amortization and amortization (EBITDA) rose by 13% to €974 million. “The first quarter of 2024 was good for Galp. In Namibia, we made progress and with our partners We were able to reduce the risks associated with the project. The test results so far have been very impressive and have exceeded all expectations, revealing the potential of the region. We are confident that Namibia will allow Galp to grow in the future,” Felipe Silva told analysts, revealing that a new phase of exploration and evaluation has been launched on the ground.
In terms of investment, the company generated €311 million by March, an 81% increase on the previous year. Galp explains that the majority of this amount was directed to the production and exploration sector (“upstream”), particularly oil in Brazil and exploration work in Namibia.
“In Namibia, our efforts have uncovered exciting opportunities that will support future growth ambitions. We have completed our first exploration campaign, which has helped reduce risks in relation to the Mopane area. In the first quarter of this year, Ghalib successfully drilled two wells where large shafts are located However, we have also completed an initial test which has shown encouraging results, as indicated by the quality and volume of resources found, as well as the testing results obtained so far. We may be in the presence of major business discoveries. “We will now focus on upcoming exploration activities and a more comprehensive evaluation of the Mopane complex.”highlighted the CFO, Maria João Carioca, in the video accompanying the presentation of the results.
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