Galp Energia Agreed to Oil Exploration in Moroccan Tarfaya Block

Galp Energia, a Portugese oil firm, has consented to purchase a stake of 50 percent in the shallow-waters of Morocco’s Tarfaya offshore block from Tangiers of Australia, making it the project’s operator.

According to Galp, the deal’s value is $41 million. That includes the previous costs and the assumption costs linked to the initial exploration well by Tangier.

Morocco’s advantage is that the water is very shallow, said Stephen Whyte, Galp’s Chief Operating Officer (COO). Whyte referred to the reduced oil investment needed to undertake projects which are closer to the surface.

Whyte said that they are aware that the well is within a working hydrocarbon system since it is adjacent to Cape Juby. The cape is in an area in Morroco’s western parts, where other exploration activities are currently being performed in some of its blocks.

Oil drilling of the initial well located in Tarfaya area’s Trident prospect is slated for mid-2014. It is estimated that Trident contains recoverable reserves amounting to 450 million barrels and a projected success rate at around 21 percent, said Galp.

Whyte said that diversifying is what is highly important for the company, not just focusing on those parts of the world that speak Portuguese.

In the past week, Galp finalized a deal with HRT Participacoes em Petroleo SA of Brazil to obtain a stake of 14 percent in three oil leases located Offshore Namibia.

When asked if Galp is planning to get additional stakes in current oil exploration projects, the COO said that the company is always considering that kind of move. He added that they want to perform a mixture of bidding rounds and farm-ins as projects become even faster if they are farm-ins.

Galp, which is primarily a refiner, has been widening its portfolio of oil exploration and production. Moreover, the company is working actively in Mozambique and Angola, and has different stakes in productive deep-water oil projects in Brazil, which include the giant field of Lula/Tupi.

The shares of Galp just settled down by 0.38 percent to 11.745 euros.