Brazilian oil giant Petrobras is seeking at least one partner in its bid to acquire a 40% stake in Galp Energia’s Mopane oil prospect off the coast of Namibia, according to sources familiar with the matter. Petrobras’ director of exploration and production, Sylvia dos Anjos, confirmed last week that the state-run company had submitted a non-binding offer for a stake that would make it the operator of the Mopane block. However, she did not specify the exact portion of the 40% stake Petrobras was aiming to secure.
The sources, who requested anonymity, revealed that Petrobras does not intend to pursue the entire 40% stake independently. One source emphasized that the partnership approach is a strategic move to mitigate risks in a highly competitive and promising area. “It’s a competitive process in a sought-after area, with potential to be confirmed. The natural thing in a bid like that is to dilute the risk with partners,” the source explained. The exact number of partners or their identities remain undisclosed at this stage.
Petrobras’ interest in the Mopane block comes at a time when the company is focused on enhancing its reserves. However, it faces significant hurdles in obtaining environmental licenses necessary for exploration projects within Brazil. This challenge has prompted Petrobras to look towards Namibia, which has recently emerged as a new hotspot for oil and gas exploration following several major discoveries along its coastline.
Galp Energia, the current majority stakeholder, is looking to sell half of its 80% interest in the Mopane field. The field is estimated to hold at least 10 billion barrels of oil equivalent. With an assumed oil recovery factor of 25% of the block’s reserves, the 40% stake in Mopane could be valued at approximately $4 billion. BTG Pactual analysts highlighted this estimate in a recent note, cautioning that such an investment, combined with potential acquisitions of two refineries in Brazil, could pose risks to Petrobras’ dividend payments.
Despite these financial considerations, the move aligns with Petrobras’ broader strategy to expand its resource base and strengthen its position in the global oil market. By partnering in the Mopane bid, Petrobras aims to leverage shared expertise and resources, reducing individual exposure to the risks associated with oil exploration in new territories.
The outcome of Petrobras’ bid and the final composition of its partnerships will be closely watched by industry analysts and investors, particularly in light of the company’s ongoing efforts to navigate environmental and regulatory challenges within its home country.
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