Woodside Energy has opted to pre-empt the sale of FAR’s stake in a licence offshore Senegal, which will increase the buyer’s stake to 82% in the Sangomar field.
Woodside will match terms agreed by India’s ONGC Videsh Ltd (OVL) for the FAR stake. FAR, also based in Australia, was unable to finance its share of the development costs owing to the oil price crash of early this year.
FAR had a 13.67% stake in Sangomar and a 15% stake in the wider Rufisque, Sangomar and Sangomar Deep (RSSD) licence.
ONGC, and now Woodside, will pay FAR cash of $45 million and reimburse costs from January 1 until the date the deal is completed. There are also various contingent payments, capped at $55mn.
“Sangomar is an attractive, de-risked asset in execute phase, offering near-term production. The acquisition is value accretive for Woodside shareholders and results in a streamlined joint venture which will assist in our targeted sell-down in 2021,” said Woodside’s CEO Peter Coleman.
“We plan to commence development drilling next year as we progress the project to targeted first oil in 2023,” he said.
For the deal to go ahead, the government of Senegal and FAR shareholders must approve it.
Woodside will cover the cost from its cash reserves. The company also pre-empted the sale of Cairn Energy’s 40% stake in RSSD to Russia’s Lukoil. The price for Cairn’s stake was higher, at $300mn plus a potential $100mn bonus.