(Bloomberg)-Galp Energia SGPS SA is considering selling its upstream operations in Angola, as Portugal’s largest oil company aims to streamline its hydrocarbon portfolio, according to people familiar with the matter.
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The company is working with a financial advisor to gauge interest in its assets in the African country, people said, asking not to be identified because the matter is private. Galp sent marketing documents to potential suitors, people said.
Angola is one of the main upstream production areas of Galp, along with Brazil and Mozambique. The company has five sanctioned projects and six exploration licenses in the country, with which it partnerships with other large oil companies. Galp’s Angolan assets have a net present value of approximately $ 295 million, according to estimates from Caixa Banco de Investimento SA.
“Unlike Brazil, Angola is not a growth area for Galp in upstream business, but it is a solid money provider. The news can be positive because it can monetize the company’s stake in mature fields. , “Carlos Jesus, an analyst at CaixaBI, said Friday. “The company’s strategy is now more focused on energy transfer, with key upstream assets located in Brazilian pre-salt.”
Galp shares rose as much as 6.7% on Friday. The stock rose 4.3% at 4:22 pm in Lisbon, giving the company a market value of 9.6 billion euros ($ 10.2 billion).
The deliberations are in the early stages and there is no guarantee that they will result in a sale, people say. A representative for Galp declined to comment.
Energy Transfer
Angolan state-owned oil company Sonangol has an indirect stake in Galp through the Amorim Energia venture, which holds 33% of the Portuguese group. Sonangol plans to remain an investor in Galp even if it sells dozens of assets to boost its finances, Chairman Sebastiao Gaspar Martins said last year.
Galp followed other large oil producers in expanding renewable energy and acquired a stake in a portfolio of Spanish solar projects in 2020, when the Portuguese company also sold interest in its natural gas distribution unit.
Andy Brown, Galp’s chief executive officer, said in February that the company has no plans to continue exploring the border despite some of the wells it is currently drilling.
This is a good time to come out if Galp can sell its Angolan assets at the high point of the oil cycle, and the move will help its focus on energy transfer in the medium to long term, according to Banco Santander SA . Galp also plans to expand into areas such as lithium, liquefied natural gas, hydrogen and renewables, Santander analyst Jason Kenney said Friday.
(Updated shares in fifth paragraph, adds analyst comment throughout.)
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