Of a dozen oil companies competing for Portuguese oil group Galp Energia's 80% stake in the promising PEL 83 block off the coast of Namibia, four majors Shell, Petrobras, Chevron and TotalEnergies are now clearly jockeying for victory. The stakes are high in this battle for Galp's offshore Mopane discovery in the Orange Basin, on the border with South Africa: in January 2021, drilling revealed a prospect estimated at almost ten billion barrels of oil and gas equivalent.
Galp has tasked BofA Securities (formerly Bank of America Merrill Lynch) to find a buyer to acquire its entire stake. Steering the sale at the bank are executive vice-chairman Julian Mylchreest, EMEA (Europe, Middle East, Africa) resources director James Sleeman and managing director in the natural resources and energy transition group Shoaib Noormahomed.
Galp Energia's 80% stake in PEL 83 is worth several billion dollars as a result of the Mopane discovery, which means that only leading energy companies can afford to bid. Brazil's Petrobras, which recently returned to the continent with an acquisition in Sao Tom and Principe, and is currently in negotiations in Benin (AI, 13/02/24), has said that it would team up with another partner to shoulder the costs of acquiring Galp's stake, which are too large for the firm to carry on its own, especially given that drilling over the next few years will be entirely at the expense of the future buyer.
Business acumen
The Mopane discovery has also been a boon for Namibian businessman Knowledge Katti, who has a 10% stake in PEL 83 through his company Custos Energy, which is 49% owned by Canadian company Sintana Energy and the rest by Katti. The young entrepreneur is likely to earn millions from the field. While Katti has not publicly said he will sell his share, he has suggested in private that if the Galp Energia deal goes through, he may well be prepared to sell his stake. Since the winner of the Mopane bid will have to bear all exploration and development costs, it will have no interest in keeping Custos Energy as a partner.
Custos Energy has a stake in other blocks the Orange Basin on top of PEL 83. As Africa Intelligence reported (AI, 12/04/23), Katti, who spends his time flying between the United States, London and Windhoek, persuaded Australian giant Woodside Energy to invest in PEL 87 and Chevron in PEL 90. Custos Energy is the project operator for all exploration and development work in these two areas, which are still undiscovered but close to Galp's block, Shell's (Graff, Jonker) and TotalEnergies's (Venus-1, Mangetti-1X). Katti's business acumen has turned him into Namibia's biggest winner from the Orange Basin boom.
Future windfall from these oil and gas discoveries, which are expected to boost the national economy after 2030, are likely to be at the heart of the campaign for the presidential election on 27 November. The leading candidate (AI, 22/03/24) is vice-president and former foreign affairs minister, Netumbo Nandi-Ndaitwah, who is standing for the ruling Swapo party.