Galp kick-starts new drilling campaign on coveted Namibia oil block

Galp has kicked off a second exploration and appraisal campaign at its high-profile Orange Basin block off Namibia, drilling the first of four wells, according to one the Portuguese energy company's junior partners in the project.

The appraisal campaign is being conducted at blocks 2813A and 2814B, part of Petroleum Exploration License 83, where Galp holds an 80% stake, alongside Custos Energy and state-owned Namcor with 10% apiece.

Toronto-based explorer Sintana Energy, which owns a 49% interest in Custos, said in a statement late Oct. 24 that Mopane 1-A, the first of four wells, had been drilled on Oct. 23 to further test the Mopane discovery.

Galp, which declined to comment on the latest campaign on Oct. 25, said in April that Mopane could hold as much as 10 billion barrels of oil equivalent in place.

News of the spud comes after the Santorini drillship, owned by Italy’s Saipem, arrived on location in PEL 83. The Mopane 1-A appraisal well will be followed by one appraisal and two exploration wells, Sintana said.

“This second campaign on PEL 83 is predicated on providing additional insights into the scope and quality of the Mopane complex,” the Canadian company added. The drilling campaign is expected to last around three months.

To date, Galp has drilled two wells on PEL 83, with the Mopane-1X well discovering “significant columns” of light oil in high-quality reservoir sands in January 2024, followed by similar results in March at the Mopane-2X well. The pair of wells also confirmed a lateral extension as they were drilled 8 km apart, Galp said.

“We look forward to the continuing progress on PEL 83, further unveiling the potential and quality of the Mopane complex,” Sintana’s CEO Robert Bose said in the statement. “These efforts should provide additional insights into this world class opportunity and into our broader Orange Basin portfolio located at the heart of this emerging hydrocarbon province.”

Exploration destination

Mopane is widely thought to be the largest find to date in Namibia’s Orange Basin, the industry’s most exciting exploration destination, where the Venus and Graff discoveries by TotalEnergies and Shell respectively in early 2022 prompted an influx of upstream players.

In April, Galp said Mopane was likely to be commercially viable. The Portuguese firm is nevertheless looking to farm out as much as half its stake in PEL 83, which would cut its interest to 40%, with a range of IOCs queueing up to enter the acreage.

A source familiar with the matter told S&P Global Commodity Insights, on condition of anonymity due to the sensitivity of the situation, that there has been “a tremendous degree of interest including from the supermajors.” Brazil’s Petrobras in particular has vocally expressed an interest in the farm-in as it looks to boost its African portfolio.

However, Galp CEO Felipe Silva said in July that it was in no “rush” to de-risk the Mopane find, adding that the company expects to have a partner in place “later in 2025” after completing the four-well drilling campaign.

Namibia does not currently produce any oil or gas and is set for an economic transformation following recent oil discoveries.

At least four drilling campaigns, including by Galp, France’s TotalEnergies and US giant Chevron, are expected to start before the end of 2024 across the basin.

Forecasts from S&P Global Commodity Insights suggest the African country’s first oil could come from TotalEnergies’ Venus project in 2029.

Mopane could come online in 2030 and plateau at 211,000 boe/d in 2037, according to Commodity Insights projections, which alone would make Namibia a significant oil producer.