Portugal's Galp seeks Namibia oil and gas partner

Portugal's Galp Energia has resumed talks with potential partners as it seeks to develop a discovery in Namibia, the company said on Monday after reporting a 29% drop in adjusted first-quarter core profit.

In February, Galp said it had found a significant presence of light oil and gas condensate in a fifth well in the Mopane field offshore of Namibia.

Co-CEO Maria Joao Carioca said the well "unlocked a new exciting area within Mopane" and Galp will advance on feasibility studies "in the coming months".

At the same time, it is seeking to sell part of its 80% stake in Mopane's Petroleum Exploration Licence 83 to a player who would become its operator.

"A partnership is our natural and preferred next step. We are re-engaging with interested parties we have had conversations with before and data is now being shared with them," Carioca told a conference call with analysts.

Also on Monday, Galp reported first-quarter adjusted earnings before interest, taxes, depreciation and amortisation fell to €669m (R14.15bn), hit by falling oil output and lower refining margins, but slightly above an average of €666m (R14.09bn) expected by 17 analysts.

Refining margins fell to $5.60 a barrel in the quarter from $12 a year ago, but Galp said the company had showed "operational resilience under an increasingly volatile market environment".

Shares fell 3% in afternoon trading.

Overall, quarterly adjusted net profit decreased by 41% from the prior-year period to €192m (R4.06bn), but was above the €185m (R3.91bn) forecast by analysts, as the company benefited from lower taxes, it said.

Core profit at the upstream unit, which comprises stakes in deepwater fields off Brazil's coast, fell 32% year-on year in the first quarter to €385m (R8.14bn).

Galp kept its full-year production guidance unchanged at more than 105,000 bpd, saying stoppage days during the first quarter already represented more than 40% of the full-year maintenance plan.

The company said its working interest oil and gas production in the first quarter dropped by 3% to 104,000 barrels per day.

The price of Brent crude fell to an average of $75.7 per barrel from $83.2 a year earlier.

Reuters