Exclusive-Petrobras’ bid for Galp’s Namibia prospect to include at least one partner, sources say

By Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) – Brazil’s Petrobras will include at least one partner in its bid for a 40% stake in Galp Energia’s Mopane oil prospect in Namibia, two sources with knowledge of the matter told Reuters.

Last week, Petrobras’ director of exploration and production, Sylvia dos Anjos, told Reuters that the state-run firm had made a non-binding offer for a stake that would make it operator of the Mopane block off Namibia’s coast. She did not detail how much of the 40% Petrobras was seeking.

The firm will not seek the full 40% stake alone, the sources said on condition of anonymity, one of whom stressed that the bidding would not impact the firm’s payout of dividends.

“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,” said one of the sources, who did not say if Petrobras was seeking one partner or more, or if it had already found one.

Petrobras did not immediately reply to a request for comment.

Petrobras’ bid comes as it seeks to boost its reserves, but has faced challenges in obtaining environmental licenses to move forward with exploration in Brazil.

The southwest African nation Namibia has come into the spotlight as a new oil and gas exploration hotspot following several major discoveries in recent years along its coast.

Galp wants to sell half of its 80% stake in the field, where estimates show at least 10 billion barrels of oil equivalent, according to the firm.

Assuming an oil recovery factor of 25% of the block’s oil reserves, the 40% stake in Mopane could cost around $4 billion, BTG Pactual analysts estimated in a note last week, warning that the investment, along with possible purchases of two refineries in Brazil, could raise risks for dividend payments by Petrobras.