The New Oil King of Africa: TotalEnergies Dominates Namibia's Orange Basin
- TotalEnergies acquired a 40 percent operated stake in Galp's massive Mopane oil discovery in Namibia via an asset swap deal rather than a direct cash purchase.
- The agreement makes TotalEnergies the operator of both the Mopane and Venus fields which consolidates its dominance in the highly prospective Orange Basin.
- Galp shares fell over 8 percent as investors reacted negatively to the lack of an immediate cash payout despite the deal securing financing for future development costs.
The global oil industry is witnessing a significant consolidation of power in the offshore waters of Namibia. French energy giant TotalEnergies SE has secured a major victory by agreeing to acquire a 40 percent stake in Galp Energia's prized Mopane field. This strategic maneuver positions TotalEnergies as the operator of the two most critical oil discoveries in the region. The deal effectively ends a highly competitive race that saw major players like Chevron and Shell vying for a piece of what is considered one of the hottest exploration zones on the planet.
The structure of the agreement is complex and relies on asset swapping rather than a simple cash buyout. TotalEnergies will receive a 40 percent operated interest in the PEL83 license which houses the massive Mopane discovery. In return Galp will gain a 10 percent stake in TotalEnergies’ nearby PEL56 license which contains the Venus discovery. Additionally Galp will receive a roughly 9.4 percent interest in another block known as PEL91. This barter style arrangement allows both companies to diversify their risk across multiple high potential assets.
Financial terms include a significant carry provision. TotalEnergies has committed to financing 50 percent of Galp’s capital expenditures for the exploration and appraisal of the Mopane field. This loan will be repaid through half of Galp’s future cash flows from the project once production begins. While the exact dollar value of the investment was not disclosed the scale of the Mopane find suggests it will be substantial. Galp estimates the complex could hold as much as 10 billion barrels of oil equivalent.
The market reaction was swift and negative for the Portuguese partner. Galp shares tumbled by as much as 8.3 percent following the announcement. Investors had evidently priced in an outright cash acquisition which would have provided immediate liquidity. Instead the deal ties Galp’s fortunes even closer to the long term development of the Namibian basin. Analysts view the swap as strategically sound but financially less exciting in the short term compared to a direct sale.
The Mopane discovery is located in the Orange Basin which has become the focal point of global oil exploration. TotalEnergies and Shell kicked off the rush with significant finds in 2022. Since then the region has seen a flurry of activity with mixed results. Shell was forced to write off $400 million in dry wells while other majors like Chevron and BP have farmed into nearby blocks hoping to strike black gold. The basin represents one of the last great frontiers for conventional oil discovery.
TotalEnergies CEO Patrick Pouyanné framed the deal as a vote of confidence in Namibia’s future as a major oil producer. By operating both the Venus and Mopane fields the company aims to create a centralized production hub. This consolidation will allow for operational synergies that could significantly lower costs and accelerate development timelines. The plan includes drilling three new appraisal wells over the next two years with the first spudding in 2026.
For Galp this deal secures a powerful partner with deepwater expertise while retaining significant upside. The Lisbon based company is a relatively small player compared to the supermajors and developing a 10 billion barrel field alone would have been a financial and logistical stretch. Bringing in TotalEnergies as the operator de risks the project execution while keeping Galp’s skin in the game.
The timeline for first oil remains years away. TotalEnergies is currently working to secure the final investment decision for the Venus discovery which is also targeted for 2026. The Mopane field will follow a similar trajectory of appraisal and engineering. This long lead time means that while the reserves are massive the cash flow will not materialize until late in the decade.
The geopolitical and economic implications for Namibia are profound. The country has no significant oil production history but could soon become a top African exporter. The influx of foreign capital and infrastructure development promises to transform the local economy. However the reliance on foreign operators raises questions about how much value will be retained domestically versus extracted by international shareholders.
Completion of the transaction is subject to customary regulatory approvals from Namibian authorities and joint venture partners. Once finalized the new ownership structure of PEL83 will see TotalEnergies and Galp each holding 40 percent with the state oil company Namcor and Custos each retaining 10 percent. This balance of power ensures that all stakeholders remain aligned as they push toward production.
Ultimately this deal cements TotalEnergies' status as the dominant force in Namibian oil. By securing the Mopane stake the French major has effectively cornered the market on the region's best assets. The challenge now shifts from finding the oil to getting it out of the ground efficiently and profitably in a world that is increasingly looking beyond fossil fuels.