Oil majors TotalEnergies and Chevron have emerged as front-runners in the auction for a 40% operating stake in Galp's Mopane discovery in Namibia, four sources told Reuters.
Oil companies have flocked to Namibia, which has no hydrocarbon production, after a string of high-profile discoveries showed the southern African country could become a top 15 oil producer over the next decade.
Mopane has estimated resources of at least 10 billion barrels, and Galp wants to announce a winner by year-end.
TotalEnergies and Chevron declined to comment.
"Negotiations regarding Namibia are progressing with a shortlist of preferred bidders strongly aligned with Mopane," a Galp press officer said, declining to name the companies.
More than 12 oil companies including Exxon, Shell and Brazil's national oil company Petrobras had expressed interest in Mopane, though Exxon withdrew in June and Petrobras said it had been outbid by Total.
Tight Race Between Majors
Namibia's geology has proven challenging to many majors, including Shell, which wrote down its discoveries as uncommercial.
Total and Chevron both have oilfield stakes near Mopane.
Africa has provided between 25% and 40% of Total's oil and gas over the past two decades. The company has high hopes for Namibia while projects in Mozambique and Uganda face financial and security hurdles.
Total already has a 150,000 barrel-per-day development in Namibia close to Mopane called Venus and has said its high gas content makes oil extraction complicated and costly. It hopes to take a final investment decision next year.
Chevron hopes to revitalize its frontier exploration. The U.S. company poached Kevin McLachlan, formerly with Total, as vice president of exploration.
Chevron found no commercial reserves after drilling a well in Namibia's Orange Basin this year but CEO Mike Wirth said it still yielded valuable information to evaluate future drilling.
(Reuters - Reporting by America Hernandez in Paris, Sergio Goncalves in Lisbon, Wendell Roelf in Capetown, and Sheila Dang in Houston, editing by Inti Landauro and Louise Heavens)