Oil & Gas

Galp's share price surged by more than 20% in early trading on Monday following the announcement of a significant oil discovery in offshore Namibia. The company reported that testing operations at the Mopane-1X and Mopane-2X wells revealed "significant light oil columns discovered in high-quality reservoir sands." This discovery suggests that the first phase of exploration in the Mopane field could contain at least 10 billion barrels of oil.

The Mopane field, located in the Orange Basin, has seen interest from other major players like Shell and Total Energies, who have also made significant discoveries in the area. Galp's tests at the Mopane wells reached flow rates of up to 14,000 barrels per day, indicating the potential commercial viability of the discovery.

Analysts are optimistic about Galp's discovery, with Citi describing the results as close to a best-case scenario and labeling the discovery as "totally transformational" for the company. The discovery's scale is comparable to the significant oil reserves in Guyana's Stabroek block, owned by Exxon Mobil, Hess Corp, and CNOOC Ltd.

In response to the discovery, Galp has initiated the sale of half of its stake in Petroleum Exploration Licence 83 (PEL 83), covering nearly 10,000 square kilometers in the Orange Basin. The company plans to hand over control of the development to the buyer, expected to be a major international energy company with strong project management capabilities.

This discovery could be a significant boost for Namibia's oil industry, attracting more investment from international oil companies. Despite the transition to clean energy, most analysts predict continued growth in oil demand for the foreseeable future.