Mopane enters next exploration phase

Drilling at Namibia's giant Mopane oil discovery is set to resume during the fourth quarter of 2026 after Galp confirmed that the next exploration and appraisal campaign remains on schedule under its new partnership with TotalEnergies, which will fund half of the Portuguese energy company's share of the project's exploration, appraisal and initial development costs.

The confirmation, contained in Galp's interim management report for the first half of 2026 released on 27 July, marks the company's first update since agreeing to transfer operatorship of Petroleum Exploration Licence (PEL) 83 to TotalEnergies. It indicates there has been no slippage in the timetable for one of Namibia's largest offshore oil discoveries.

"Looking ahead, Bacalhau ramp-up is ongoing and the partnership with TotalEnergies in Namibia is advancing, on track to commence our next exploration and appraisal campaign in Mopane during Q4," Galp co-chief executive officers Maria João Carioca and João Marques da Silva said.

Under the transaction, TotalEnergies will assume operatorship of PEL 83 with a 40% interest, while Galp will retain 40%, with Namcor and Custos Energy each holding 10%. As part of the agreement, TotalEnergies will carry 50% of Galp's expenditure during the exploration and appraisal programme and the first phase of development, substantially reducing Galp's upfront capital commitments while accelerating work towards commercialisation. The carry will later be repaid from a portion of Galp's future cash flows once production begins.

The funding arrangement comes as Galp enters the next phase of the project from a position of considerable financial strength. During the first half of 2026, the company generated replacement cost-adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of €2.216 billion, reported €812 million in adjusted net income, generated €1.789 billion in operating cash flow and €591 million in free cash flow. Net debt stood at €1.379 billion, equivalent to 0.4 times EBITDA, prompting Galp to upgrade its financial guidance for the remainder of the year.

Although Galp did not disclose a Namibia-specific budget, the company invested €696 million across its global portfolio during the first half of 2026, including €196 million in upstream activities. Most of that expenditure was directed towards the Bacalhau development and the Tupi infill drilling programme in Brazil, leaving the more capital-intensive Mopane programme to gather momentum as TotalEnergies assumes operatorship.

The combination of Galp's strengthened balance sheet and TotalEnergies' agreement to carry half of its project costs means financing is unlikely to constrain the next phase of drilling. The renewed campaign builds on one of the world's most significant recent offshore oil discoveries.

Galp's exploration programme in PEL 83 has already delivered the Mopane-1X and Mopane-2X discoveries before the Mopane-3X exploration well encountered additional columns of light oil and gas condensate in separate reservoir targets, confirming that hydrocarbons extend beyond the original discoveries and reinforcing the licence's development potential.

The resumed drilling campaign will begin with the Mopane Extension exploration well during the fourth quarter of 2026. Its objective is to determine the extent of the discovery and establish the recoverable resource base capable of supporting the first phase of development.

The well will be followed by two appraisal wells in 2027 designed to confirm reservoir continuity, pressure behaviour and fluid characteristics while providing the engineering data required to finalise the field development concept ahead of a targeted final investment decision in 2028.

Current development planning envisages an initial offshore project capable of producing more than 200,000 barrels of oil per day from discovered resources estimated at between 800 million and 1.1 billion barrels of oil equivalent. Those volumes remain contingent resources that will be further appraised before they can be converted into reserves supporting commercial development.

Beyond the initial project, TotalEnergies has identified more than 1.5 billion barrels of oil equivalent in additional exploration potential across the Mopane Extension, Quiver and Sobreiro prospects, suggesting the licence could support multiple phases of development over the coming decades.

The operator also expects to accelerate development by leveraging its experience from the neighbouring Venus discovery, using common deep-water engineering expertise, contractor networks, procurement systems and logistics to advance Namibia's two largest offshore oil discoveries in parallel while retaining separate ownership structures and development plans.

With the operator transition progressing, funding arrangements in place and the next well due to spud within months, attention is now shifting to the Mopane Extension well, whose results are expected to determine the size, configuration and timing of Namibia's second major offshore oil development.