FAR from a solution

FAR has defaulted on its most recent development cash call on Phase 1 of the Sangomar/SNE development. Under the Sangomar Joint Operating Agreement, any party that defaults on its financial obligations and cash calls have a six month rectification period, during which time it will pay LIBOR+2% on the unpaid amounts. FAR will also not be able to participate in any of the operating committee meetings or participate in any voting on JV issues. If...

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SNE partners buy FPSO

Cairn and FAR have announced a material increase in the capex for the SNE development from USD2.2 billion to USD3.7 billion (plus USD500 million contingency) for Phase 1. This has been driven by the partners' decision to buy an FPSO rather than lease it. This does however bring the opex down, estimated form c.USD14/boe to c.USD11/boe. FID is expected to be taken at the end of 2019 with first oil forecast for late 2022. The development will...

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SNE partners progress to FEED for Phase 1 of the development

The SNE JV offshore Senegal (Cairn 40%, Woodside 35%, FAR 15%, Petrosen 10%) has entered FEED for Phase 1 of the SNE development. The engineering contract has been awarded to the Subsea Integration Alliance (OneSubsea, Schlumberger and Subsea 7). First oil is being targeted for 2022 with an initial production rate of c.100mbopd. The exploitation plan had previously identified a total development of 500mmbbl of oil over a multi-phase development...

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Second chance for Petronas in West Africa

Following the recent disappointment at the Samo-1 well in The Gambia, Petronas has another chance in West Africa on the other side of the border in Senegal. Petronas is growing its West African exploration portfolio and is continuing its search for more acreage. In August Petronas had farmed-in to 30% of Total's Rufisque Offshore Profond block, marking its entry into Senegal. Total retains 60% in the block with Société Nationale des Pétroles...

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The Gambia's Samo-1 well disappoints

The JV in offshore Blocks A2/A5 has announced a disappointing result on the Samo-1 well. The JV, which comprises FAR Limited 40%, Petronas 40% and Erin Energy 20%, has hit water. FAR Limited had prospective P50 resource estimates of 825mmbbl (gross unrisked) with a 55% geological chance of success. Wireline logs indicate that the target was water bearing. The Government of Gambia has now granted a six month extension to end of June 2019 to...

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Petronas makes offshore discovery in Gabon

PETRONAS has made the Boudji-1 discovery in deepwater Gabon. The discovery is located in Block F14 or Likuale in which PETRONAS holds 50% as an operator, Woodside holds 30% and the government holds 20%. The block lies in deepwater between depths of 2,500-3,200m. Exploration activity in the deepwater has been slow with the country previously focussing in the onshore and coastal areas. Gabon has held ad-hoc licensing rounds for the offshore...

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FAR goes further with another industry partner

On 26th February, FAR announced that it had agreed to farm-out a 40% interest in Blocks A2 and A5 in The Gambia to Petronas. FAR will retain 40% and operatorship; the remaining 20% is held by Erin Energy – FAR farmed in to the blocks in March 2017 in return for upfront payment of USD5.2 million and FAR funding an exploration well (to be drilled in 2018) up to USD8 million. Under the deal, Petronas will fund 80% of the Samo-1 exploration...

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Senegal moves ahead

Cairn Energy, the operator of the SNE field in Senegal, released a resource update on 22nd August as part of its half-year announcement. The updated 2C resource base is 563mmbbl gross (vs. 473mmbbl in May 2016) and now brings it in line with Woodside's estimate of 560mmbbl, but is still far below that of partner FAR which carries 641mmbbl (assessed by RISC). The differing resource estimates is nothing new and we constantly see the other partners...

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SNE North is Sirius

Cairn has completed the SNE-1 North exploration well (Sirius prospect), located c.15km north of the original SNE-1 discovery. The well reach TD 2,837m and was completed ahead of schedule. A 24m gross hydrocarbon column was encountered across three intervals with 11m net condensate and gas pay in the primary objective and 4m net oil pay in the secondary objective. A full set of oil, condensates and gas samples were recovered to surface from the...

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Major interest in Senegal

On 3rd May, Total announced that it had signed two agreements with Senegal: Acquisition of the RPO block (Total 90%, Petrosen 10%) which lies in deepwater immediately adjacent to the SNE and FAN discoveries (Cairn 40%, Woodside 35%, FAR 15%, Petrosen 10%) Agreement to perform studies to assess the exploration potential of Senegal’s ultra-deep offshore and become operator of an exploration block. This activity follows the recent transaction...

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FAR AMI with CNOOC in Senegal and The Gambia

On 31st March, FAR announced that it had entered into an Area of Mutual Interest Agreement with Chinese state giant CNOOC for the joint co-operation on the evaluation of and entry into new opportunities across Senegal and The Gambia. This follows on FAR’s farm-in to 80% of Blocks A2 and A5 in Gambia from Erin Energy earlier this week. The announcement on the arrangement with CNOOC follows: “FAR has signed an Area of Mutual Interest (“AMI”)...

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Near-term appraisal for FAR

FAR has announced that the partners of the SNE field have contracted the Stena DrillMax for a minimum two well programme starting in Q2 2017. The ship is currently in the Canary Islands and ready to be deployed with crew assembled. The two firm wells, SNE-5 and SNE-6, will target the upper reservoir units and will include drill stem testing and likely an interference test between SNE-3 and SNE-5. The programme aims to firm up the resource base to help scope and refine the field development plan. It is noted that the new rig has been contracted...

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Senegal offshore reaches threshold for commerciality

On 8th February, FAR Ltd announced an updated independent resource report (by RISC) of the SNE discovery offshore Senegal (Cairn 40%, ConocoPhillips 35%, FAR 15% and Petrosen 10%). The report increases contingent resources for the discovery to 240mmbbl 1C (from 150mmbbl), 468mmbbl 2C (from 330mmbbl) and 940mmbbl (from 670mmbbl). This assessment includes the SNE-1 discovery well and subsequently reprocessed (more accurate) 3D seismic. Significantly...

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