France’s TotalEnergies and Brazil’s Petrobras have each acquired a 42.5% stake in an offshore oil exploration licence in Namibia, expanding their presence in one of the world’s last major oil exploration frontiers.
According to Reuters, the two companies bought the stakes in the PEL104 licence, located north of Namibia’s massive Mopane oil discovery.
The deal deepens TotalEnergies’ footprint in the southern African country, where it is aiming to become the first company to produce oil by the end of the decade.
For Petrobras, the acquisition advances its strategy to make Africa its main exploration region outside Brazil.
Interest in Namibia has surged as oil companies seek to replace declining reserves. The country currently has no oil or gas production, but a series of major discoveries has raised expectations that it could become one of the world’s top 15 oil producers within the next ten years.
TotalEnergies will operate the PEL104 block. The company already leads the Venus project to the south, a planned 150,000 barrels-per-day development, and holds a 40% operating stake in Galp’s Mopane discovery, which is estimated to contain more than 10 billion barrels of oil.
Petrobras and TotalEnergies acquired the licences for an undisclosed amount from Maravilla Oil and Gas and Eight Offshore Investments Holdings. The two companies have worked together for more than a decade through joint oil projects in Brazil.
“We are very pleased to expand our portfolio and continue exploring the prolific resources of Namibia, in order to unlock further value that will benefit the country and all stakeholders,” said Nicolas Terraz, TotalEnergies’ president of exploration and production.
Petrobras had been one of around a dozen companies, including Exxon and Shell, that bid for a stake in the Mopane discovery, which TotalEnergies secured in December.
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“We are closely examining the West African coast and the good opportunities in Africa,” said Sylvia Anjos, Petrobras’ head of exploration and production, noting that the African coast shares geological similarities with Brazil.
Over the past two years, Petrobras has taken stakes in offshore fields in South Africa and São Tomé and Príncipe, seeking to apply its expertise in complex geology. That same geological complexity has contributed to Shell writing down its Namibian assets as uncommercial and has led TotalEnergies to warn of higher development costs.
Africa has accounted for between 25% and 40% of TotalEnergies’ oil and gas production over the past two decades. For the company, Namibia offers a key opportunity to rebuild reserves as projects in Mozambique and Uganda face financial and security challenges. Over time, increases in production from countries such as Angola and Libya have helped offset declines in Nigeria, Gabon, Congo and Algeria.
Once the transaction is completed, Maravilla Oil and Gas will exit the licence entirely. Eight Offshore Investments Holdings will retain a 5% stake, while Namibia’s state-backed Namcor will hold 10%.
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Image Credit: Essential Business
