Galp forks out N$3bn for oil hunt
Mopane campaign ongoing
By late next month, Galp should know whether its light oil discoveries in Mopane are commercially viable.
Jo-Maré DuddyPortugal’s Galp Energia will pump more than N$3 billion into its oil hunt in its Mopane prospect offshore Namibia this year.
Speaking at an investor conference last week, Galp CEO Filipe Silva said the company has earmarked about 150 million euro as total capital expenditure in the Orange Basin this year.
“Everything is going according to the original plan,” Silva told analysts.
Galp holds an 80% interest in Petroleum Exploration Licence (PEL) 83, with Namcor and local business man Knowledge Katti’s Custos Energy each with 10%. Half of Custos belongs to Sintana Energy.
Galp is embarking on a second well in Mopane. Once that is done, a drill stem test (DST) will be conducted next month.
Wells
Two significant oil column discoveries were identified in the first well drilled in Mopane last year.
“What we have made public is that we have something that looks sizable,” Silva commented on Mopane 1X.
“Clearly, we have very encouraging pressures, very encouraging porosity and very encouraging permeability. But we’ve only drilled one well, so it’s too soon at this stage to see what is going to be our next move,” he added.
With Mopane 1X, Galp drilled through the two reservoirs and went all the way to the source rock. The company is also targeting two reservoirs with Mopane 2X.
The second well and the DST will allow Galp to better evaluate the size and commerciality of Mopane, Silva said.
‘No rush’
Galp is “not in a rush”, Silva said, adding that Galp is “now focusing on evaluating the exploration upsides”.
“Clearly, we need to de-risk what we have in our hands. We will analyse all the options and whatever creates the most value for our shareholders, we will consider this in due course.
“We’re not expecting a short-term decision on this. The campaign is ongoing,” he said.
By late March, Galp “will know about commerciality” in Mopane, Silva said.
“We should have a very good view of the volumes of the reservoirs that we’ve hit.
“So it is highly possible that we will be drilling more wells within the block, given what we’re seeing so far. So it will give us a good view of the reservoirs where we are by late March,” according to the Galp CEO.
Galp is “acutely aware of the value of bringing production in Namibia as soon as possible; you can rest assured”, Silva told analysts.
“Nothing is going to get delayed. Quite the opposite,” he said.
“We’re doing a lot of work already to make sure that in parallel with the process of a potential divestment, a lot of the de-risking, including more appraisal wells and exploration wells, will continue in parallel,” Silva added.