Galp Bets on Africa and Brazil as Oil Demand Defies Energy Transition

Core Insights - Galp Energia is increasing exploration efforts in Africa and Latin America due to resilient global oil demand and a slower-than-expected energy transition [1] - The company is in advanced discussions to sell a 40% stake in its Mopane field offshore Namibia, which has estimated reserves of 10 billion barrels [1][2] - Galp's diversified upstream portfolio, including the Bacalhau field in Brazil, is expected to sustain growth and fund the transition to renewables [4] Group 1: Exploration and Development - Galp is targeting frontier regions to enhance its upstream portfolio, with a focus on the Mopane field in Namibia [1] - The company holds licenses in São Tomé and Príncipe and is exploring additional opportunities across Africa [2] - In Brazil, Galp has secured three offshore blocks in the Pelotas Basin, partnering with Petrobras [2] Group 2: Financial Performance and Projections - The Bacalhau field, in which Galp holds a 20% stake, began production this year and is projected to increase output by 40%, generating approximately $400 million in annual free cash flow [3] - Upstream projects accounted for 63% of Galp's earnings last year, with profits from oil and gas expected to support the company's transition into renewable energy sources [4] Group 3: Strategic Vision - Galp's Executive Board Member Nuno Bastos emphasized the need for fossil fuels in Europe amid changing global priorities due to the war in Ukraine [1] - The company aims to balance its portfolio with ongoing projects in Namibia, São Tomé, and Brazil to ensure sustainable growth [4] - Galp is committed to developing complex energy projects while investing in the next generation of energy solutions [5]