The turbulence in the oil market is not positive for the development of their industry. Every company needs a certain stability and certainty to develop an investment plan. In the world of oil, it is very complicated. In a few months, the price of a barrel can vary by several tens of dollars, making projects that seemed profitable no longer so and vice versa. In the absence of an official explanation, it is this (the recent drop in the price of crude oil) that could have led the oil giant ExxonMobil to withdraw from negotiations to acquire a 40% stake in the impressive Mopane offshore oil field in Namibia, currently in the hands of Galp.
It is estimated that this site, located under the sea and benefiting from the PEL 83 exploration permitcontains at least 10 billion barrels of oil (possibly more), with a potential valuation well in excess of $10 billion. ExxonMobil’s withdrawal comes at a time in which other oil companies are analyzing the possibility of acquiring this strategic stake, but none has finalized its decision.
Although it is a juicy crude oil field (one of the biggest discoveries in recent decades), it seems that no one wants it now, or at least no one wants to take the lead in extracting it. Galp is offering not only to sell its stake, but also to hand over the role of lead operator to the buyer, thus opening the way for companies looking to strengthen their position in the emerging Namibian energy market.
Galp’s strange strategy
Despite this, commodity media outlets are saying that ExxonMobil’s withdrawal has not stopped interest in the Mopane block. More than a dozen oil companies, including Shell and Petrobras, are still in talks with Galp for a possible acquisition. The block, with its estimated reserves, represents a great opportunity for companies looking to strengthen their portfolio of exploration and production assets in Africa. Negotiations are continuing amid growing interest in the Namibian oil market following a series of promising discoveries, the agency said. Reuters.
Namibia is emerging as a new frontier for offshore oil exploration, analysts say. Recent discoveries by Shell and TotalEnergies have highlighted the region’s significant energy potential, prompting other international players to consider investing in Namibia’s oil blocks. The Mopane field could play a key role in transforming Namibia into a major oil producer.
It is a country located in one of the poorest regions in the world (it has land borders with Angola to the north, with Zambia to the northeast, with Botswana to the east, with South Africa to the southeast and south and with the Atlantic Ocean to the west) and despite a vast territory (one and a half of Spain falls within its borders) has only 2.5 million inhabitants.The 10,000 to 11,000 million barrels of crude oil have the potential to transform the lives of these 2.5 million people.. That’s a lot of oil for such a small population. Cases like tiny Guyana, whose economy is leading the world in growth thanks to crude oil, have become the way forward for other countries with untapped resources.
These astonishing resource figures, revealed in the summer of 2023, have raised high expectations about the potential that this new geological deposit, which also extends into South African waters, could have. It is worth noting that these estimates are based on only a handful of completed exploration and appraisal wells: “We have only just begun to scratch the surface of the Orange Basin,” Maggy Shino, Commissioner for Petroleum at Namibia’s Ministry of Mines and Energy, said at a conference a few months ago.
On the other hand, andNamibia’s oil boom will have more than just a national impact. The country’s proximity to South Africa, the region’s largest power, and its location on the Atlantic coast give it strategic importance. Namibia has sought to foster regional cooperation in the development of its oil resources. It is a member of the Southern African Development Community (SADC), which promotes economic integration and collaboration among its member states. Namibia also actively participates in the African Petroleum Producers Organization (APPO) to share knowledge and best practices in the oil sector.
In addition, the African country has also been actively seeking partnerships with international organizations and countries. Although Namibia currently remains outside OPEC, the country has expressed notable interest in joining the organization. Recent oil discoveries have fueled this “dream.” However, the doubts of major oil companies when it comes to getting down to business with the big investment in Mopane are “stuck” on this promising field and could end up destroying Namibia’s “dreams.”
