Portuguese oil company Galp Energia has agreed to divest its oil exploration and production operation in Angola to local company Somoil for approximately $830m.

Out of the total value of the deal, Galp will receive nearly $655m upon completion of the transaction.

The remaining $175m is a contingent payment that would be paid in 2024 and 2025 based on the Brent price.

With the sale, Galp intends to shift its focus towards its main upstream business in Brazil, where it also operates renewable plants.

Galp CEO Filipe Silva said: “This transaction allows Galp to crystalise value from mature upstream assets and supports the high-grading of our upstream portfolio and our decarbonisation strategy.

“We are confident that Somoil, already present in block 14, will be a strong contributor to the development of these longstanding Galp assets.”

Under the deal, Galp will sell a 9% stake in block 14 that comprise several fields including Tombua, Landana, BBLT – Benguela, Belize, Lobito, Tomboco, and Kuito.

The sale also includes a 4.5% stake in block 14-K, which includes the Lianzi field; a 5% stake in block 32, comprising the producing Kaombo field; and the CNE development project.

Subject to customary terms and conditions, the transaction is scheduled for completion in the second half of 2023.

Bank of America Securities served as the financial adviser to the Portuguese oil company for the transaction.