Woodside closes Sangomar buy. Drilling to start next week

Australian firm Woodside has completed the acquisition of FAR Limited’s entire participating interest in the Rufisque Offshore, Sangomar Offshore, and Sangomar Deep Offshore (RSSD) joint venture.

Rendering of the Sangomar Field Development FPSO (Image courtesy of SOFEC)

Woodside said on Wednesday that the purchase price was $45 million, plus a working capital adjustment of approximately $167 million to reflect the acquisition effective date of 1 January 2020.

The final completion payment to FAR, after adjustments and remedying of FAR’s defaults under the joint operating agreement, was approximately $126 million. Additional payments of up to $55 million are contingent on future commodity prices and timing of first oil.

Woodside acting CEO Meg O’Neill said: “The continued safe execution of the Sangomar project is a key priority for Woodside in 2021. A major milestone is expected tomorrow with the arrival of the Ocean BlackRhino drillship in preparation for the commencement of development drilling next week.

The construction of the floating production storage and offloading facility, which is a converted oil tanker, is well underway and we are receiving delivery of subsea equipment in Senegal.

Sangomar is a world-class resource which will deliver near-term production and revenue for Woodside. We are targeting first oil in 2023”.

As a result of this acquisition, Woodside’s participating interest in the RSSD joint venture has increased to 82 per cent for the Sangomar exploitation area and to 90 per cent for the remaining RSSD evaluation area.

Woodside intends to sell down its participating interest in the RSSD joint venture to approximately 40-50 per cent in the second half of 2021.

The closing of the deal brings to a close a long sequence of events in which several companies attempted to buy either FAR’s stake in the RSSD project or the entire company.

As for the project, the Sangomar Field Development Phase 1 will comprise a stand-alone FPSO with a production capacity of approximately 100,000 barrels per day, 23 subsea wells, and supporting subsea infrastructure.

Chinese shipyard Cosco Shipping Heavy has already started working on a conversion of a very large crude carrier into an FPSO. The vessel was named FPSO Léopold Sédar Senghor and the conversion will take around two years.