Mozambique: Galp sells its upstream assets to ADNOC

Portuguese energy company Galp has signed an agreement with Abu Dhabi National Oil Company (ADNOC) for the sale of a 10% stake in Zone 4, offshore Mozambique.

Zone 4 includes Coral Sul FLNG, in operation since 2022, as well as the potential Coral North FLNG and Rovuma LNG onshore developments, both due to be sanctioned in 2024/25.

Once finalized, Galp will receive around $650 million for its shares and shareholder loans, already net of capital gains tax.

At the transaction reference date of December 31, 2023, lease obligations amounted to $525 million.

Additional conditional 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 and is expected to close in 2024.

Located in Zone 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 Zone 4 exploration and production concession contract.

Portuguese energy company Galp held 10%, while Korean Gas Corp. and Mozambique's national oil company ENH also held 10% each as minority partners.

In early 2024, performance tests on Eni's Coral Sul FLNG unit, conducted by Technip Energies, confirmed the requirements for LNG production in excess of 3.4 million tonnes per year.

The Coral Sul is Mozambique's first LNG project, and the first floating LNG facility ever deployed in deep waters on the African continent.

The project was sanctioned in 2017. The FLNG unit will produce LNG from 450 billion cubic meters of gas in the Coral reservoir.