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UPDATE 1-Galp buys 50 pct operating stake in Moroccan oil block
December 3, 2012 / 5:56 PM / 5 years ago

UPDATE 1-Galp buys 50 pct operating stake in Moroccan oil block

* Deal worth 41 mln euros

* First well drilled by mid-2014

* Galp says block in very shallow water (Adds COO quotes)

By Andrei Khalip

LISBON, Dec 3 (Reuters) - Portuguese oil company Galp Energia has agreed to buy a 50 percent stake in Morocco’s shallow-water Tarfaya Offshore block from Australia’s Tangiers, which would make it the operator of the project.

Galp said on Monday the value of the deal, including Tangiers’ past costs and assumption of costs related to the first exploration well, amounted to $41 million.

“The upside (in Morocco) is that it is in very shallow water,” Galp Chief Operating Officer (COO) Stephen Whyte told reporters, referring to the lower costs of exploring for oil close to the surface.

“We know the well is in a working hydrocarbon system because it is right next to cape Juby,” Whyte said. Juby is in a region in Western Morocco where several blocks are already being explored.

The first well is to be drilled by mid-2014 in the Trident prospect of the Tarfaya area. Galp said Trident is estimated to contain 450 million barrels of recoverable reserves and put the chance of success at 21 percent.

“What’s very important here is that we are diversifying. This time is not just in the Portuguese-speaking world,” Whyte said.

Last week, Galp reached an agreement with Brazil’s HRT Participacoes em Petroleo SA to get a 14 percent stake in three offshore Namibian oil leases.

Asked whether Galp plans to take more stakes in existing exploration projects, Whyte said Galp always considers such a move. “We want to do a mix of farm-ins and bidding rounds. Your projects get much faster when they are farm-ins.”

Galp, mostly a refiner, has been expanding its oil exploration and production portfolio. It also actively works in Angola and Mozambique and has various stakes in prolific deep-water Brazilian oil projects, including the giant Lula/Tupi field.

Galp shares closed down 0.38 percent on Monday at 11.745 euros. (editing by Jane Baird)

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