FAR board backs Sangomar FID
The board of Australia’s FAR Limited has expressed its support for FAR to take the FID for the Woodside-operated Sangomar field development located offshore Senegal as the company is looking to finalize the financing for the project.
In early December, Woodside submitted its development and exploitation plan for the Sangomar field, formerly known as SNE, ahead of the Final Investment Decision for the project scheduled to occur later this month.
Woodside is the operator of the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture, which includes the Sangomar field, with a 35% interest. Woodside’s partners are Cairn Energy, FAR, and Petrosen with 40%, 15%, and 10% interest, respectively.
In an update on Tuesday, FAR said that the 2020 Work Program and Budget (WP&B) had been unanimously approved by the joint venture and would be submitted to the Minister of Energy for consideration as part of the process for approval of the Development and Exploitation Plan, expected by Presidential decree in the coming weeks.
Following the successful A$146 million equity placement on December 12, 2019, FAR’s board of directors on December 19 met and unanimously gave their support for FAR to take FID for the Sangomar field development on the basis that FAR will receive binding and committed financing term sheets for the senior debt facility and conditional on the operator taking its unconditional FID.
FAR continues to make progress with the required financing for the Sangomar field development following the conditional equity placement on December 12.
FAR is pursuing a senior secured Reserve Based Lending (RBL) facility from a number of financial institutions including Macquarie Bank.
According to FAR, during the week ending December 20, two banks advised that their participation in the RBL had received credit approval. A third bank advised it will seek credit approval during the week of January 6, 2020.
FAR has received a number of proposals to provide a junior debt facility and the company remains in discussions with several potential junior debt providers including international oil traders.
The recent equity placement is conditional on a shareholder meeting and finalizing a senior debt term sheet.
FAR managing director, Cath Norman, said, “It has been an eventful end to the year for the FAR team, firstly in enjoying a visit from the Senegal Minister of Energy and the Director General of Petrosen who led a delegation visiting the FAR offices in mid-December. In the run-in to the Christmas break, we have confirmed that 2 of the 3 lead arrangers to our debt facility have completed their internal credit approvals and the third lead arranger will be following 6 January next year. It is very pleasing that FAR’s financing is coming together, ready to commence the execution phase of the field development and exploitation in January 2020.
“The Government of Senegal remains committed to closing out all existing issues before the end of the year and the Joint Venture expects to receive the Presidential decree confirming the Exploitation Authorisation in the coming weeks. These events are aimed to coincide with each party to the Joint Venture taking their FID’s in time for the project execution to start-up.”
The Sangomar Field Development Phase 1 concept is a stand-alone floating production storage and offloading (FPSO) facility with 23 subsea wells and supporting subsea infrastructure. The FPSO is expected to have a capacity of around 100,000 bbl/day, with the first oil targeted in early 2023.
The FPSO will be designed to allow for the integration of subsequent Sangomar development phases, including gas export to shore and future subsea tie-backs from other reservoirs and fields. Phase 1 of the development will target an estimated 230 MMbbl of oil.
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