TotalEnergies cements Namibia position with Galp asset swap

By Alban Kacher, Shadia Nasralla and Sergio Goncalves

Dec 9 (Reuters) - TotalEnergies TTEF.PA has cemented its position in offshore Namibia by agreeing to an asset swap with Portugal's Galp GALP.LS that makes the French company the operator of the major Mopane discovery, it said on Tuesday.

In exchange for a 40% stake in the PEL83 licence holding the Mopane project, Galp will get a 10% interest in Total's PEL56 licence holding its Venus discovery and a 9.4% stake in the PEL91 licence. All three licences are next to each other.

Total will pay for half of Galp's exploration and appraisal spending on Mopane, although Galp will have to pay this back from future cash flow from the field. QatarEnergy is the second-largest stakeholder in PEL56 and PEL91.

TotalEnergies shares were up 0.6%, but Galp shares slumped more than 11%.

RBC analysts said they saw the deal as "more constructive for TotalEnergies than Galp, with no upfront cash payment likely to be seen as negative", and the full repayment of exploration and appraisal spending perhaps also disappointing.

They said incorporating Venus into the deal should help align interests between the partners, although "it also implies slightly higher capex for Galp over the coming years."

Total and Galp plan to drill three wells in Mopane over the next two years starting in 2026.

Last month, sources told Reuters that Total and Chevron CVX.N were front-runners for the stake in Mopane.

"This agreement positions TotalEnergies as the operator of the two largest oil discoveries in Namibia and paves the way for the development of a major production hub," the French group said.

The finalisation of the transaction is expected to be completed in 2026, it added.

Galp Chair Paula Amorim said the partnership with Total would "significantly reduce the risks of Mopane, aligning a concrete path for the asset's future".