Senegal is Closing in on Its First Offshore Oilfield
Dec 07 2019 Read 341 Times
Following a new development plan proposal from Woodside Petroleum, the Sangomar deepwater field off the coast of Senegal could soon start producing oil. If the project goes ahead it will be the first offshore rig for the West African country and could break new ground for the national energy industry.
Formerly known as SNE, the Sangomar block is one of the largest global hydrocarbon discoveries of the decade and offers an estimated production capacity of 100,000 bbl/day. In a recent statement released by Woodside Petroleum, the company confirmed it has submitted development plans to the Government of Senegal and requested authorisation to exploit the area.
Woodside sets 100,000 bpd production target
Phase One is scheduled for early 2023 and will target an estimated 230 million barrels of oil using a standalone floating production storage and offloading (FPSO) facility. The facility will feature 23 subsea wells, as well as supporting infrastructure. Overall, the facility will offer a total capacity of around 100,000 bpd.
Woodside is still putting together a final investment decision (FID), with the decision marred by complications between the Australian-owned company and Far Limited, an Australian-based oil and gas company that owns a 15% stake in the Sangomar development. Far Limited discovered the Sangomar block in 2014 and claims it was denied the pre-emptive opportunity to purchase a 35% stake from ConocoPhillips. The clash has been taken to international arbitration, with Far Limited hoping to win a larger share of the lucrative offshore field.
Senegalese producer vies for 35% share
Woodside only holds a 35% share, which means agreement between the two parties is pivotal before exploration can go ahead. Meanwhile, Far Limited is causing complications with its own request for exploitation authorisation, which outlines plans to target 645 million barrels of oil.
“Developing this world class oil field in Senegal, the largest global hydrocarbon discovery in 2014, has the potential to transform FAR from explorer to material producer and become one of the largest ASX-listed oil producers in early 2023,” reads a statement released by Far Limited.
Reuters predicts the dispute could be resolved by the end of 2019. The outcome will determine how much both Woodside and Far Limited will have to spend on the project, which is estimated to cost in excess of US$4 billion.
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