Galp Energia's (GLPEY) Mozambique Stake Acquired by ADNOC

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Galp Energia SGPS S.A. (GLPEY) announced that its 10% stake in the Area 4 concession in Mozambique has been acquired by ADNOC (Abu Dhabi National Oil Company). In recent news, ADNOC has also acquired an 11.7% stake in Phase 1 of NextDecade’s Rio Grande LNG project in Texas. The UAE oil giant’s latest acquisition aligns with its strategy to expand its low-carbon energy portfolio.

The acquired assets include the Coral South Floating LNG (FLNG) facility, which is currently operational, along with the Coral North FLNG development and Rovuma LNG onshore facilities that are yet to be developed. Galp Energia has mentioned that both the planned projects will receive the necessary approvals by 2024-25. Coral South is operated at a production capacity of 3.5 million tons per annum (mtpa), to which Coral North is expected to add another 3.5 mtpa. The Rovuma project is expected to have a production capacity of 18 mtpa.

Upon closing the transaction, Galp Energiawill receive $650 million for its shares and shareholder loans from ADNOC. It is also expected to receive contingent payments of $100 million and $400 million, subject to final investment decisions of Coral North and Rovuma LNG, respectively. The sale of GLPEY’s 10% stake in the Area 4 concession is a part of its strategy to upgrade its upstream portfolio and focus on its high-value assets. The Portuguese energy company also sold off its assets in Angola in 2023.

Per the terms of the deal, ADNOC will also gain a share in the LNG production from the Area 4 concession. The combined capacity of the acquired assets in Area 4 came in at 25 mtpa.

Following the Mozambique sale, Galp Energia will now concentrate on the farm-down of its majority stake in the Mopane discovery. The company had previously announced the discovery of substantial oil reserves in the Mopane discovery, situated offshore Namibia. Considering its significant potential, Galp Energiaalso mentioned its plans to eventually develop the Mopane discovery.

ADNOC considers low-carbon and renewable energy as foundational pillars for its growth in the future. ADNOC plans on diversifying its energy portfolio to meet the growing global energy demand. The COP28 climate summit was hosted in Dubai in 2023, where nearly 200 countries reached the consensus to move away from fossil fuels. The summit was presided by the chief executive of ADNOC.