TotalEnergies said Tuesday it had reached a deal to become a partner in the Mopane oil field off the coast of Namibia, where exploration remains underway.
The deal with Galp will see TotalEnergies joining the Portuguese firm as an operator as more exploration wells are drilled in view to develop the field for production.
“The transaction positions TotalEnergies as the operator of the two largest oil discoveries in Namibia and opens the way for the development of a major producing hub, generating long-term value for the country and partners,” the French firm said in a statement.
Galp said last year it estimated the Mopane field could contain at least 10 billion barrels of oil.
The deal will see TotalEnergies take a 40 percent stake in the petroleum exploration licence that includes Mopane. Galp will retain a 40 percent stake, alongside the Namibian national oil company Namcor and private firm Custos, which each hold 10 percent stakes.
In exchange, TotalEnergies will finance half of Galp’s capital expenditures for exploration and appraisal of the Mopane field, as well as initial development, with repayment to come from future cash flows from the project.
Galp will also get a 10 percent stake in the nearby Venus exploration zone, where TotalEnergies has discovered oil.
TotalEnergies said it hopes to make a final investment decision on whether to develop production at Venus next year.
TotalEnergies shares were up 0.4 percent in afternoon trading on the Paris stock exchange, where the blue-chip CAC 40 index was down 0.6 percent.
