Galp’s Namibia Gamble Heats Up Amid Profit Slump

Galp Energia is doubling down on Namibia’s booming oil prospects—even as its financials take a hit. The Portuguese energy giant has revived talks with potential partners to develop its Mopane field discovery, just weeks after reporting a 29% plunge in Q1 adjusted core profit to €669 million ($761 million). The move signals a strategic pivot to high-potential exploration while weathering turbulent markets.

Namibia’s New Oil Frontier

The Mopane field, where Galp holds an 80% stake, is emerging as a hotspot. In February, the company confirmed significant light oil and gas condensate in a fifth well, unlocking fresh feasibility studies for the offshore block. Now, Galp is actively seeking to offload part of its majority share in Petroleum Exploration Licence 83, rekindling discussions with previously interested operators. “This isn’t just about capital—it’s about securing expertise to fast-track development,” an industry insider familiar with the negotiations told Wired.

“Namibia’s potential is undeniable, but Galp needs a heavyweight partner to de-risk the play.” — Energy Analyst

Profit Pressures and Market Realities

The push comes amid stark financial headwinds. Galp’s Q1 adjusted net profit cratered 41% year-on-year to €192 million (though narrowly beating analyst forecasts of €185 million). Upstream earnings took a 32% nosedive to €385 million, while refining margins halved to $5.60 per barrel from $12 in 2023. Brent crude’s average Q1 price of $75.7—down from $83.2—further squeezed margins, triggering a 3% share price drop.

Yet there are bright spots: production dipped just 3% to 104,000 barrels per day (bpd), with full-year output still projected above 105,000 bpd. The company also completed 40% of annual maintenance early, buffering against future disruptions. “They’re threading the needle between short-term volatility and long-term bets,” noted a Lisbon-based energy trader.

The Bigger Picture

Galp’s Namibia play reflects a broader industry scramble for frontier assets. With traditional basins maturing, explorers are increasingly drawn to Namibia’s untapped reserves—a trend supercharged by TotalEnergies’ and Shell’s recent mega-discoveries. For Galp, monetizing Mopane could offset refining woes and rebalance its portfolio. But as one Namibian official cautioned, “The clock’s ticking. First movers will lock in the best terms.”

One thing’s clear: in the high-stakes game of offshore oil, Galp isn’t folding its cards just yet.