Portuguese multinational energy corporation, Galp, has announced plans to divest from its Angola upstream assets, having signed an agreement with Angolan private equity company, Somoil, for the sale of its assets and stakes in the southern African country’s upstream sector. The sale projected to generate up to $830 million, net of capital gains taxes.
Announced on 13 February, the agreement is subject to customary terms and conditions, with completion of the transaction is expected for the second half of 2023.
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$655 million in funds will be received upon completion while the remaining $175 million in contingent payments, due in 2024 and 2025, will be dependent on Brent oil price.
“This transaction allows Galp to crystalize value from mature upstream assets and supports the high-grading of our upstream portfolio and our decarbonization strategy,” stated Galp CEO, Filpe Silva, adding, “We are confident that Somoil, already present in Block 14, will be a strong contributor to the development of these longstanding Galp assets.”
Having posted a record annual profit on 13 February as a result of higher-than-average oil prices and refining margins, Galp’s divestment strategy comes amidst favorable market conditions as the company seeks to streamline its hydrocarbon portfolio.
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Present in Angola since 1991, Galp’s upstream portfolio in the country includes assets and stakes in Block 14 (9%), in which the company has three fields – Kuito, Benguela-Belize-Lobito-Tomboco, and Tômbua-Lândana – in production; Block 14K (4.5%), which features the Lianzi field; and Block 32 (5%), in which Galp serves as the operator of the Kaombo project and the Central North East development.
