FAR Finally Agrees to Sell to Woodside in Senegal - Africa’s premier report on the oil, gas and energy landscape.

FAR Finally Agrees to Sell to Woodside in Senegal

Shareholders of FAR Limited, the Australian hydrocarbon property broker, have agreed to sell the company’s stakes in Senegal to Woodside Energy.

The deal is that Woodside will pay FAR, $45Million, then reimburse FAR’s share of working capital, including any cash calls, from  January 1, 2020 to completion of the sale, with entitlement to certain contingent payments capped at $55Million. 

Woodside moved, last December, to exercise its right of first refusal to preempt the sale of FAR’s interest in the Rufisque offshore, Sangomar offshore and Sangomar deep offshore (RSSD) contract area to the Indian player ONGC Videsh Vankorneft. FAR’s interest in the RSSD Joint Venture comprises 13.67% of the Sangomar exploration area and 15% of the remaining RSSD evaluation area. 

By the time the transactions are concluded, Australia’s largest E&P firm would have bought up all the stakes belonging to its partners Cairn Energy and FAR in Senegal. It will then hold 82% working stake in the Sangomar exploitation area with the state owned Petrosen holding 18%. Its working interest in the remaining Rufisque, Sangomar and Sangomar Deep (RSSD) evaluation area (including the FAN and SNE North oil discoveries) will be 90%, while Petrosen holds 10%.

In January 2020, Woodside took Final Investment Decision to develop the Sangomar field, located in 800 metres of water. It will be Senegal’s first offshore oil project and the floating production storage and offloading (FPSO) vessel will have a production capacity of approximately 100,000 barrels of oil per day. The execute phase of the Sangomar Field Development includes the drilling of 23 wells, construction and installation of the subsea network and the construction and installation of the FPSO. The company targets first oil in 2023.

In December 2020, Woodside concluded the completed the acquisition of Cairn’s interest with the purchase price of $300Million plus a working capital adjustment of approximately $225Million, which included a reimbursement of Cairn’s development capital expenditure incurred since 1 January 2020. Additional payments of up to $100Mllion are contingent on commodity prices and timing of first oil.

After all these buys, Woodside will, in its own view, have“simplified the structure of the joint venture ahead of our planned equity sell-down in 2021”. 

The company is convinced that the Sangomar development “is an attractive, de-risked asset that offers near-term production to potential buyers.”

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