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The company, headquartered in Lisbon, announced a “significant commercial discovery” in Namibia.
Galp informed investors last Sunday that the oil reserve in Namibia, in the first phase of testing of the Mopane campaign, has the potential to be a “significant commercial discovery”. This could supply Portugal for more than 140 years, according to calculations published by the newspaper Correio da Manhã.
In a statement sent to the Securities Market Commission (CMVM), the company explains that “just in the Mopane complex and before drilling additional exploration and appraisal wells, the estimates of hydrocarbons in place are 10 billion barrels of oil equivalent, or more”.
Galp’s oil discoveries in Namibia have added to those made off the coast of the Southwestern African nation. In the past two years, major oil companies Shell Plc and TotalEnergies have made discoveries that turned the sparsely populated country into a benchmark for exploration on the continent.
Galp, based in Lisbon, is the operator with an 80% stake in the Namibia license area. The National Petroleum Corp. of Namibia, or Namcor, and Custos each hold a 10% stake.
Share Price Increase
Galp’s shares rose on Monday by 16.61% to 18.71 euros, following the announcement of the discovery. This is a natural reaction, analysts consulted by Lusa say, who outline two possible scenarios. One of them involves the sale of the project.
If the company decides to sell part or all of the project, which it holds 80% of, it could garner a significant amount of capital in the short term, which it could use in other projects or distribute to its shareholders. The Chief Operating Officer of ActivTrades Brazil, Mário Martins, emphasized that “when an effective discovery occurs, the company realizes a substantial part of its investment, even if only potentially”.
In the event that the company puts up for sale part or the entirety of the project, this “will allow it to realize a portion of that profitability, in addition to reducing risk”, the analyst explained. “Similarly, the confirmation of these reserves provides raw material for many more years of the company’s operation, thus creating additional expectations of future profits,” added Mário Martins.
The other scenario involves exploiting that reserve in Namibia, which will allow a very large future cash flow increase, since this reserve has enormous potential.
