Galp Energia, SGPS, S.A. (US3640971053.SG) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to Galp's Namibia Partnership Conference Call. I will now pass the floor to João Gonçalves Pereira, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining our conference call on the partnership we've just announced in Namibia. I'm here with our co-CEOs, Maria João Carioca and João Marques da Silva, who will walk you through a short presentation and then take your questions. As always, before we begin, let me remind you of our usual disclaimer. During today's session, we may make forward-looking statements. Actual results may differ due to factors outlined in our cautionary statement included in the published presentation. With that said, Maria João, shall we begin?

Thank you, João, and welcome, everyone. Today, we bring to you the way forward for our Namibia NAP's Upstream assets, the Orange Basin, PEL83 block encompassing Mopane. That way forward is now supported by the strong partnership Galp has just established with TotalEnergies in Namibia. So let me take a step back to recall that safely drilling 5 wells in just over a year was a remarkable achievement for Galp. Now bringing on board a highly experienced deepwater operator is at the onset, an important recognition of our work. This transaction allows Galp and Total to join forces on the 2 largest discovered resources in Namibia, Mopane and Venus and supports the potential creation of a major producing hub in the country. For Galp, this represents not only the best conditions for a clearly value-accretive development of the Mopane asset, but also an important step in strengthening our Upstream portfolio, supporting our production profile in the aftermath of our recent Bacalhau first oil and bringing clarity to our cash flow and CapEx profiles well into the 2030s. So after very constructive negotiations, we see strong alignment between Galp and Total on forging a strategic partnership to accelerate the development of the Upstream business in Namibia with this asset swap. For Mopane, we will launch an exploration and appraisal campaign, including 3 wells over the next 2 years. This will, of course, help to further derisk resources and progress towards the first potential development. The first of these 3 wells is already under assessment for 2026. For Venus, this is a discovery where Total is already more advanced, clearly a few years ahead of Mopane with a clear development plan that includes 160,000 barrel oil per day FPSO and the potential for first oil by 2030. Continuing to mature the project and maintaining a constructive dialogue with the Namibian authorities will be key as we target FID in 2026. Looking back at all the discussions we had this year about Galp's priorities for this partnership, I do believe this partnership delivers on every single one. It was essential for us to partner with a highly credible operator with proven ultra-deepwater expertise and the financial strength to drive Mopane forward. We're mindful of Mopane's importance for Galp's equity story, and ensuring strong alignment on the derisking of the asset was fundamental as it was establishing concrete and immediate next steps, such as the well already under assessment for 2026. Galp's solid financial position was instrumental in enabling Galp to pursue a value-driven transaction. Our position in Venus is consistent with strengthening our portfolio and supporting our growth strategy as it expands our options and brings forward potential operating cash flows from Namibia. In terms of structure, the core of this transaction is an asset swap with Total. Galp will exchange a 40% participating interest in PEL83, home to Mopane, for a 10% interest in PEL56, home to Venus, and a 9.4% interest in PEL91. In addition, and importantly, Galp and Total have signed a funding agreement under which 50% of all Galp's investments towards the first development in Mopane will be carried. This includes exploration, appraisal and development CapEx. As per normal industry practices, the carrier will then be repaid only upon first oil in Mopane through 50% of Galp's future cash flows from the project and enabling Galp to significantly derisk its exposure. Now João, would you like to take it away?

I do. So thank you, Maria as well, and good afternoon, everyone. This transaction is more than a deal. It shows the strong commitment that both Galp and Total have to Namibia. It also reinforces our shared goal of creating more value from the assets as we foresee infrastructure, technical and operational synergies between PL83, PL56 and PL91, increasing the chances of successful developments in old blocks to maximize recoverable volumes and value. As we approach the end of 2025, we see average production close to 110,000 barrels per day. And we see a very clear, very tangible short-term growth, especially after starting up Bacalhau just a few months ago. In 2026, as Bacalhau ramps up, these are highly competitive assets with breakeven levels around $20 per barrel and the carbon intensity at almost half the industry average. But this new partnership also adds more depth to Galp's strong Upstream portfolio and supports our unique growth story. We have several high potential developments already coming to life, which should contribute to operations over the next 4 years. Venus at pre-FID stage, pre-FEED stage, will now play an important role here. As we have a pipeline of exciting opportunities with Mopane as a frontrunner now benefiting from Total vast experience globally and top-tier operationship capabilities to accelerate delivery, which we believe will support Galp's growth well into the 2030s. So as Maria João and I look at Galp's investment case, we feel increasingly confident about the portfolio we are building and how it positions Galp for the future. We now welcome your questions. Thank you.

[Operator Instructions] We are now going to proceed with our first question. And the questions come from the line of Paul Redman from BNP Paribas Exane.

As I'm limited to one question, I just wanted to ask whether you can give us any guidance on how this asset was valued through the negotiation period? And how we should think about, yes, as I say, the valuation of the asset from here?

Good afternoon, Paul. Thank you for your question. So indeed, this is, of course, one of the core priorities and one of the core concerns throughout the whole negotiation process. So the transaction hinges on 2 fundamental elements driving valuation. On the one hand, the asset swap with Venus and then on the other hand, the carry that we will have with Total supporting all investments going forward from E&A all the way up to the development and first oil. So the way we've been looking at this is both in terms of financial valuation, but also in terms of the fit that the transaction plays into our portfolio. Fundamentally, when we first looked at the structure of the transaction, what comes to light is the fact that this gives us a unique and rather strong position in the basin. This is a young basin as I'm sure that you're all very much aware of. Being able to partner with what is currently the most experienced operator in the basin with a track record of ultra-deepwater with knowledge of the other asset that has proven of relevant interest in the basin so far, Venus, this made sense on a number of fronts to us. And it made sense not just for the asset in itself as synergies will come into play, experience will be exchanged. The readout on all the information we shared was it made very obvious that this was an operator that had in-depth and insight to bring into the exploration of the asset. So in addition to those elements that play into the asset, there's also an element playing into our overall portfolio because the asset swap is done with an asset, Venus, that is mature is probably an expression that is too early to assign to Venus, but it's certainly more mature, more advanced, I'd say, than where Mopane currently stands. So that plays very well into the way we look into our Upstream production profile. It will forward cash flows coming in from Namibia. It will actually bring us closer to having those cash flows coming into our P&L, and it will give us additional experience into the overall basin and into the economics of the basin. So it made a lot of sense. Now how does this play out? So it is indeed an asset swap, 10% of Venus, so PEL56, plus approximately 10% of PEL91. And to add to that, the carry of all of the 50% that Total will be supporting in all the investment in E&A all the way up to development until first oil, so first cash flows. So fundamentally, the value driver here is whereas we were at this stage supporting 100% of the bill for developing Mopane, we will now be supporting 25% of that bill. So this is a significant value. If you come to think of what could be the relative weight of these 2 components, the asset swap versus the carry, when we run the numbers and we look at what is our expected case for the asset, this is approximately a 70-30. So actually, 70% of the value of the deal is hinging on the carry and then the value of the asset swap with Venus is approximately 30%. So this is more or less the relative weight that we see in the deal. And it speaks to a central case of having effectively this significant carry by Total throughout the period that it takes for what will be first oil, so a first FPSO of relevant size being delivered and then starting to be repaid. And I should highlight here that the carry is a carry that is uncapped and noninterest-bearing. So this, as it starts to be repaid, will be fully dependent on the existence of sufficient cash flows and those cash flows will be determining the pace of the repayment. So bringing these 2 elements together, it gives us strong alignment with Total. It sets all the right incentives, and you've heard me talk about the importance of alignment and the importance of having a partner that in itself and then by design in the deal is fully aligned towards keeping pace in the development of Mopane. So the valuation drivers spoke to the strategic intent. So to us, this is a deal that indeed checks a lot of boxes out there say it checks all the boxes. I'm aware that it doesn't immediately distribute cash. But then again, vis-a-vis the value drivers that I was just alluding to, we found that to be a trade-off that was still significantly value accretive. Thank you, Paul.

And the questions come from the line of Matt Smith from Bank of America.

I was hoping you could touch upon the at least 3 wells that have sort of been committed for Mopane described as exploration and appraisal wells, that campaign. Could you sort of please describe the sort of what you're looking to achieve there? Is it to go back to the Northwest region? Is it to appraise the Southeast region? Just trying to get a sense of sort of what further derisking you're trying to do there, please?

Thank you so much, Matt. So indeed, these 3 wells, I'd start by saying that they're particularly important to us because they were instrumental in making sure that we were able to build strong alignment with the partner. So the discussion on the steps forward was one of the core topics in making sure that we converge and could build a positive partnership. Now what are we looking for with these 3 wells and potential DSTs? I think somehow the fact that Galp drilled 5 wells in a little over a year kind of turned into a bit of a success curse, if you'd like, if that's a possible expression. We drilled pretty fast. That gave us a lot of information. We were aiming towards information that allowed us to derisk the asset sufficiently to now come to a partnership that could indeed take the asset to the next stage and take the asset to an actual concept for driving value and to actually explore it. But indeed, we were drilling to derisk the assets, which means that we will now need to continue that path already hand-in-hand with our partner and already aiming at a concept. So what do I mean by this? We did touch 2 clusters. You've heard us discuss before the Northwest and the Southeast clusters, different ones. What we're trying to get with these additional wells right now is just a better sense of what is the way to approach and what is the best concept. So each of these clusters, the fact of it being worthy does not mean that it is the priority or that it should be #1. And I would recall that the Southeast complex, for instance, has only had one well drilled. So clearly, learning to be done there. I mean, if you think -- even now if you think of Venus, Venus is 2 years ahead of us and additional information and a lot of additional design work done into it. So what we're looking for right now is precisely catching up on that additional information required for us to actually be now not in a derisking for partnership mode, but in a derisking for development mode. So that, I would say, is the fundamental concept behind it. So agreeing to those 3 wells with Total was fundamental. The pace at which that drilling will be conducted was also relevant to us. So having an understanding that the first of those 3 wells will already take place in '26 was also a core element in coming to an agreement with Total. And I think it will give us -- they will give us a clearly design to give us a better understanding of the Mopane complex, and they will certainly be critical in unlocking the development most worthy. So that is the fundamental purpose. Thank you, Matt.

We're going to proceed with our next question. And the questions come from the line of Biraj Borkhataria from RBC.

I'm just going to ask 2 quick ones, if that's okay. So first one is embedded in this deal, there will be an assumption of whether the FPSO is purchased or leased because obviously, that would change the value of the carry. So could you clarify which one it is? And then are you possible to give any clarity on '26 and '27 capital spending on the updated basis of your portfolio?

Thanks, Biraj. I'm assuming you are talking about the Mopane FPSO, whether it will be owned or leased. We're still designing the concept. Then again, economically, if it is leased, it should represent less CapEx. So economically, it shouldn't be a major driver in terms of impacting the valuation. I think at this stage, a number of the scenarios we've run are hinging towards an owned solution. But again, I wouldn't want to lock it up. I'll tell you that we looked at the economic implications of the 2 scenarios, and we feel that they could both be encompassible within the scenarios we're studying. As for the 2026, '27 CapEx profile, we've been very focused on closing the deal. We'll be getting, of course, a better understanding now. I'm sure you are aware that Venus is very well positioned towards FID already in 2026, but Total has been engaging towards making sure that the best terms and conditions for that 2026 FID to be readily under the best conditions. So there are still ongoing conversations. We're still trying to make sure that the best conditions in the basin are present. So we'll see how these discussions evolve. And this will, of course, affect to some extent, the CapEx profile. Still very, very positive on having an early 2026 FID and with that ensuing the CapEx profile. So this fits to a rather large extent with our current CapEx profile. You know that Bacalhau's investment is now in a phase down as we ramp it up. We have a number of projects delivered next year. So to an extent, this is a year of completion and final investments on the number of what were our ongoing projects. And Venus as it comes in, should the conditions be met, should conversations be successful towards that end, will fit in rather nicely with our profile without demanding any additional or excessive effort on our part or stressing our balance sheet in any way. Thank you, Biraj.

We are now going to proceed with our next question. And the questions come from the line of Guilherme Levy from Morgan Stanley.

I was just curious about the capital deployment of Venus once it starts. Of course, you just mentioned your initial expectations for 2026 and 2027 and how they are depending on the FID decision of Venus. But once it starts, should it be a little bit more phased across the different tiers, a little bit more concentrated in the back end of the decade? How should we think about that?

Thanks, Guilherme. So on Venus, Venus is, as I put it before, at a more advanced stage than what we've got in Mopane, I'd say 2, if not 3 years ahead of it. So this means that -- and as I just mentioned a couple of minutes ago, we are indeed aiming for an FID in 2026, not a decision taken already. Again, still building on the conditions towards that decision, but well positioned. It is a decision for a 160 FPSO. So the way works have been progressing, a lot of the preparatory studies and a lot of the preparatory analysis are already conducted, so we understand and we've been given exposure to -- full exposure to the materials by Total. So what we see is a project that is now in its final FEED stage. So there is a case there for first oil in 2030. Should, again, and I cannot stress this enough, should all the conditions be in place for the FID in 2026. So I know a lot of the work done right now, combines not just the technical FEED stage work, but also the dialogue with the authorities to make sure that not only Venus is ready, but now with this deal in hand that, that the partnership is in full bloom to drive the assets forward. So again, FEED stage, a significant 160 FPSO. Let's hope for the FID in 2026.

We are now going to proceed with our next question. And the questions come from the line of Josh Stone from UBS.

Congrats on getting the deal signed. I guess I was a bit surprised really that Mopane was not better prioritized than the development in terms of that was one of your key conditions going into the sales process, and you did have multiple bidders. So only one well planned in '26 fewer than I had expected. I was also under the impression that AVO-1 was sort of ready to go, so to speak, in terms of FID. So can you just -- I mean, you've talked about that Venus is 2 years ahead. But when you look at the economics, how does Venus compare to, say, AVO-1 on your calculations? And is there any chance that Mopane could get ahead of the queue in terms of the development here?

Okay. Josh, thank you. Thank you so much for the question and for the congratulations on signing. So when we look at the relative development stages of Venus versus Mopane, I would say that indeed, the difference of 2 to 3 years that we've been talking about apply. So what this means is not necessarily that the partnership is going to be prioritizing Venus over Mopane. It's simply reflecting the relative maturity states of the 2 assets. We know, again, as I mentioned before, the work we did in Mopane was fundamentally around making sure that we have sufficient clarity of having clusters that were development worthy. So AVO-1 was looked at and you mentioned it, is it not ready to FID? No, it was looked at in a way that still leaves significant room and work to be done until we have a concept, until we have even the clear decision and this is now a decision to be taken within the partnership of what is the priority within the different AVOs that we have in Mopane. And again, the Southeast cluster was also very worthy of consideration, is also a very interesting complex. So what we're looking for fundamentally is understanding what is the overall development of the Mopane complex and what is the optimal development. This is something that for Venus has already been undertaken. So the last 2 to 3 years, we believe that was the nature of the work that was done by Total. That is the nature of the work that we have ahead of us now. So it's not so much about not being ready, it's about being at a stage where the work towards being ready still is to be done and still has significant inputs to contribute to the final decision. We do not have sufficient information to have a final decision just now.

We are now going to proceed with our next question. And the questions come from the line of Irene Himona from Bernstein.

Congratulations on this. Back to valuation, if I may. You mentioned the value of the CapEx carry is about 70% of the total value of the deal. Of course, there is no development concept as yet. There is no CapEx. But if I was to take a sort of big-picture top-down view and to assume that one FPSO plus subsea and everything else today would cost possibly around $10 billion to $11 billion, meaning a $2 billion, $2.5 billion undiscounted CapEx carry net to Galp. Would you say that it's possible and realistic or not?

Thanks, Irene. I think indeed, I think that is one scenario. And again, we're working towards making sure that the concept is clear enough, but that is indeed something that underpins fundamentally the calculation. So those are reference values. So again, this is a carry that is uncapped. So should we look for an FPSO that is larger than the numbers you're outlining there, we will have the comfort of knowing that Total will be covering that additional investment. So once we bring our current commitments, which currently stands at 100% and will now be at 25% of the overall investment that leaves us with sufficient balance sheet and sufficient flexibility to make sure that we can carry the exercise forward. So the valuation numbers you're referring to are a reference case. We'll see what the opportunity actually entails. And what we try to make sure was that the partnership terms were such that without the cap and without any interest-bearing repayments, that gives us sufficient comfort that we will be ready to support the full development of the asset. With that in mind, the time value of the money carry that you referred to is the driver of value for this component of the transaction. So yes, it's referencing a case to that type of understanding of the asset and then taking the time value of money into consideration when running the valuations.

We are now going to proceed with our next question. And the questions come from the line of Matt Lofting from JPMorgan.

I wanted to just ask about, I think the carry component of the transaction, if I understand right, only is limited to the first development, as you've called it or the first FPSO. But with that in mind, can you just share your thoughts on to what extent the sort of the full 10 billion barrels in place that Galp's referenced over the last year or 2 has been factored in or recognized by TotalEnergies in this transaction? And to what extent Galp would see multi-FPSO upside beyond that first development on taking a long-term view?

Thank you so much, Matt. So all information concerning the asset, the PEL83 overall data we have available, all work done on the overall block, but specifically and to full detail, all information, all available data, all incoming data as we were working through the negotiations, all of that has been shared with Total. So our models are in full transparency shared with Total. Actually, you have probably heard me mention in previous calls that one of the elements in this negotiation that was something that we built on was precisely coming to a common understanding of the asset with the potential candidates, in this case, with Total. So we have alignment with Total on prospectivity. Our focus has been very much on making sure that we successfully align interest towards the first development. So I think both parties towards all our conversations, we always had a very clear intent of not diverging, not losing focus, not going elsewhere in the block to look for an opportunity before we have a clear case for Mopane. So we do acknowledge that there's more E&A to be done. I think we've been flagging that very consistently. It should be very obvious when we have only one well drilled in Southeast. So that is all taken into consideration with Total and is part of the buildup towards this first development. The carry being limited to this first development, obviously reflects the fact that after that, there will be cash flows coming in and the economics will be more easily supported by both partners. So that is a significant value of carry already. And we understood that it was best to concentrate that carry on the first development and to have its spread. Having said that, it is a development. It is a carry until development. But to us, it is very relevant the fact that it also covers all of this remaining E&A activity that we were mentioning. So this is E&A activity that will be carried by Total, will only be returned upon cash flows from first -- from first oil from production. So there's no repayment whatsoever after conclusion of E&A or upon entry of a development stage. This goes all the way to first cash flows. Thank you, Matt.

We are now going to proceed with our next question. And the questions come from the line of Alessandro Pozzi from Mediobanca.

I think you now have a good insight of Venus development as well. And I was wondering, is there a scenario whereby potentially you could accelerate the development of Mopane by using a similar development so that you can accelerate the build-out of the FPSO, if you want to build one? And -- or perhaps maybe Mopane is different in terms of fleet characteristics from Venus, so I was wondering, yes, if you can share your thoughts about similarities in the 2 developments?

Thank you, Alessandro. I think there are 2 sides to the answer to that question. There is -- it needs to be very clear that the concept for Venus is not at all one that we have a clear idea of being the same one that may apply to Mopane. The characteristics of the 2 blocks are rather different. So what we do see in terms of advantages have to do with the fact that, of course, the experience in the basin, the learnings that Total has been gathering in drilling in Venus. So the logistics and the common infrastructure and the setup, those will all, of course, accelerate and improve the economics of exploring Mopane. But we don't see it at this point. Again, still conducting work towards understanding what is the concept to best explore and to optimally explore and to come to conditions for exploration in Mopane. We don't see that as benefiting from using exactly the same concept. Distance will not allow for a joint exploration, but it will allow for everything that has to do with setting up a production hub in the basin that we see as being a major advantage. We are also keen and eager to engage with local authorities in understanding how can those conditions be improved and how can this hub be helped towards improved conditions. So that is very much the focus. We do see benefit, but the benefit is not indirectly applying the same concept from one block to the other. Thank you, Alessandro.

We are not going to proceed with our next question. And the questions comes from the line of James Carmichael from Berenberg.

I guess, clearly, gas handling has been something that Total has been pretty open about as being a challenge for Venus. And it seems that they've overcome it, obviously, if they're looking to FID next year. So just wondering if that experience was helpful during the process and whether you've got any more clarity on the gas content at Mopane given all the data that you've had coming in over the last few months.

Thanks, James. I think clearly helpful to have an operator in the basin that is dealing with the idiosyncratic terms of the basin. What we do see is Total is a highly experienced operator. So there are, of course, ideas and the exchanges between -- our technical teams have been rather positive, and the teams have been discussing solutions to cope with gas. And again, the levels of gas are very different, not just between Venus and Mopane, but also Mopane is a block with a number of AVOs. And what we've found in the different AVOs is also different amidst itself, and that's part of the reason why we've never really guided on gas content for the overall of Mopane precisely to avoid the temptation to extrapolate values that will not be realistic in any -- in the specific circumstances of a specific solution. Now what we have been discussing with Total is the solution that's envisioned for Venus. We see that as a solution that provides sound handling of the gas characteristics of Venus. I'm sure that being a couple of years ahead will give us experience in then understanding whether or not that solution will be applicable to Mopane. But at this stage, that is fundamentally what we're trying to incorporate into our thoughts on Mopane.

We are now going to proceed with our next question. And the questions come from the line of Naish Cui from Barclays.

Can I ask about the timing of this transaction, please? Just wonder why do you feel so strongly that this transaction needed to be down right now and within 2025? Do you feel that more value will be extracted if you can wait for 1 more year?

Thank you. Can you hear me? Hello?

Yes, I can, yes.

A bit of a technical difficulty here. So in terms of timing for this transaction, we discussed before the why now when we launched -- when we relaunched, actually, we went back in the market after initial discussions with a number of players that had shown interest in Mopane over the time. I think fundamentally, as we gathered information from our drilling campaign in '24, I would put it down to how we were looking at the decision tree ahead of us. We felt that for Galp to continue on its own, that was not the best way forward for the asset. It would be very difficult for Galp to withstand the full 100% of the CapEx required. So when looking at our decision tree, continuing on our own and weighting the probabilities or the risk profile, if you'd like, and I think that was fundamentally the nature of the decision, what was the risk profile of continuing on our own versus believing that we already have sufficient information to reengage with the market to explain to potential bidders what it is that we see in the asset, why it is that we like the asset, why it is that we want to retain a significant stake in the asset, but still we feel that we need to bring someone in as an operator with the relevant experience, that was the thought process and that was what drove us forward. So the timing had a lot to do with the sequence that came after the fast drilling that we had been conducting over 2024, the amount of information that, that drilling had already provided to us. And the fact that even towards local authorities, our commitment has always been in open dialogue to make sure that the terms and conditions of our licenses that have always been met and that are already met, but that require that we are active in pursuing solutions to explore the asset and to actually drive towards first oil to make sure that, that timing, that pace had the best conditions possible, and we did feel that a partner at this stage would be the way to build those conditions. So the timing is entirely risk profile and asset development pace and ambitions driven and that was the core consideration in our process. Thank you.

Now going to proceed with our next question. And the questions come from the line of Mark Wilson from Jefferies.

My question would be, you've mentioned there's no cap on the 50% carry on PL83, but there are 2 clear spend areas, the exploration and appraisal of at least 3 wells in 2 years and then a potential development of Mopani area after it. So my question is, does the Total 50% carry continue if you end up doing more exploration and appraisal drilling either within the 2 years or after that, if the Mopani development has not been sanctioned by that point?

Thank you, Mark. Excellent question. Indeed, it does. The agreement with Total is carry all the way towards first oil and first cash flows at Mopani. So we wanted to agree on a reference program as part of making sure that we did meet that alignment and that signaling towards the right pace of developing the asset. But the 3 wells plus DSTs is what was commonly agreed by with the technical teams as being the joint vision as to what we would find at this stage with the knowledge currently available to us and the necessary work in E&A stage towards then the follow-up steps. Having said that, should we need less, should we need more? The partnership is designed to make sure that we can sit down and take those decisions. We would not want to lock a potential partner into a circumstance where we would be drilling just because we had a contractual arrangement, but could see no economics in continuing to drill in E&A. And we also didn't want to have a partnership whereby we still needed a fourth well or an additional DST, and that would already be cost for contention and not sufficiently covered in the arrangement. So it's a very simple arrangement, 50% carry all the way to first cash flows from first oil.

We are now going to take the final question. And the questions come from the line of Ahmed Ben Salem from ODDO BHF.

It's regarding the size of the implied resources of Mopane. So you will receive 10% of Venus that contains 1 billion BOE and that you will hand over 40% of Mopane that is supposed to be larger than Venus, containing around 3 billion BOE of recoverable resources. So what is the size of Mopane that is implied in this deal? And does the carry agreement compensate for the difference?

So again, the carry -- the current agreement covers not only the asset swap, but also the carry. So again, Venus is more advanced. So the numbers that we are comparing reflect those relative stages of advancement. The numbers for Mopane at this stage has indeed been shared with Total. So those are the ones that are being considered in our sizing of the opportunity. And if you take into consideration the valuation of Venus as it currently stands, and I think you can look up a couple of numbers in the market. I think there's publicly available information on Wood Mac and on Welling. So you can have a sizing of that amount. And then if you just take the valuation drivers for the carry that I discussed earlier on with Irene and a number of your colleagues on the call, you'll see that this leads us to a valuation that is relatively balanced vis-a-vis Venus. So indeed, there's a lot of additional prospectivity on both sides, and that also adds to the consideration. But fundamentally, the resources have all been shared. Aligned vision on the sizing of those resources that is driving the relative valuation of these assets, even though Venus is more advanced, and we're then complementing the difference with the carry at the reference case that I mentioned earlier in the call. So fundamentally, irrespective of additional prospectivities, the alignment of the value of the 2 assets given their sizes and the teams have worked together to get alignment on the sizes as well. And that is reflected in the size, the extent and the timing of the carry.

We are not going to proceed with one final question. And the question comes from the line of Ignacio Doménech from JB Capital.

I have one question on the CapEx for Venus. I just wanted to know what would be the incremental CapEx for Galp until the first oil and stipulated with that 70%, 30% value of the transaction that you were mentioning before. Just wanted to know what is the funding cost that you have assumed for the carry at Mopane?

Ignacio, the incremental CapEx -- sorry, can you hear me?

Yes. I perfectly hear you.

Okay. So on the CapEx of Venus. Venus is again a much more advanced project. So if we take a look at what is expected there, this is CapEx that will push us through all the way to the final years of 2030. We're looking at 160 FPSOs, so a relatively large ship. No FID decision has been taken yet. So we still have the final numbers to reconsider and to size and to validate. But we understand and we were shared -- or given information as to the current state of discussions from Total with providers and building the overall case towards the economics of Venus and the FID decision that is to be taken. We are in agreement with those terms. As you may well understand, those are not public at this stage, but we are in agreement. And once more, this is something that from the numbers we've been given knowledge of, from our experience in the basins, from what we know to be the logistics and the operational requirements to set up the investment there, we are comfortable with what's being designed and with what's being outlined. This fits rather well with, again, our own CapEx profile. And I will remind you once more that as Bacalhau and our decarbonization investments in the refinery phase down, these leave us with additional room to invest. I think some of you will have heard me say that I will not sit on a pile of cash. This is actually a usage of cash that we find that is rather value accretive and that allowed for this partnership to be set up in a way that we believe is strategically relevant for Galp's Upstream portfolio. So all in all, comfortable with the CapEx, but no FID yet. Competitive economics as we see them fully in agreement and comfortable with the effort level that will require our own balance sheet. Thank you, Ignacio.

Thank you. This concludes the question-and-answer session and the conference call. Thank you all for participating. You may now disconnect your lines. Thank you.