Galp Sells Its Upstream Assets in Mozambique to ADNOC

Portuguese energy firm Galp has signed an agreement with Abu Dhabi National Oil Company (ADNOC) for the sale of 10% stake in Area 4, offshore Mozambique.Area 4 includes Coral Sul FLNG, in operation since 2022, as well as the prospective Coral North FLNG and Rovuma LNG onshore developments, both expected to be sanctioned during 2024/25.

Upon completion, Galp will receive around $650 million for its shares and shareholder loans, already net of capital gain taxes.As of the transaction reference, dated December 31, 2023, lease liabilities were $525 million.Additional contingent payments of $100 million and $400 million will be payable with the final investment decision of Coral North and Rovuma LNG, respectively.The transaction is subject to customary third-party approvals, with completion expected during 2024.

Located in Area 4, Coral Sul FLNG is operated by Mozambique Rovuma Venture (MRV), a joint venture owned by Eni, ExxonMobil and CNPC, which holds a 70% interest in the Area 4 exploration and production concession contract.Portuguese energy firm Galp held 10%, with Korean Gas Corp. and Mozambique’s state oil company ENH also holding 10% each as minority partners.

In early 2024, the performance tests on Eni’s Coral Sul FLNG unit, led by Technip Energies, have confirmed the requirements of LNG production of above 3.4 million tons per year.The Coral Sul represents Mozambique’s first LNG project and first floating LNG facility ever deployed in the deep waters of the African continent.The project was sanctioned in 2017. The FLNG unit will produce LNG from the 450 billion cubic meters of gas of the Coral reservoir.