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FAR fails to raise debt for Sangomar oil project in Senegal

The Africa-focused Australian oil and gas company FAR has failed to raise debt for its Sangomar oil project in Senegal, due to adverse markets conditions cause by the Covid-19 pandemic and the fall in crude oil prices. Consequently, the company will continue to explore and evaluate all options to pursue the project. In addition, FAR settled a dispute with Woodside Petroleum over its acquisition of a stake in the project. Woodside Petroleum, which operates the project, does not anticipate delays in Sangomar Development and Exploitation Plan.

In January 2020, the government of Senegal approved the Sangomar Development and Exploitation Plan along with the exploitation authorisation, submitted by the Australian oil and gas company Woodside, the operator of the Sangomar (formerly SNE) Field Development 1. Consequently, Woodside has executed the purchase contract for the floating production storage and offloading (FPSO) and has issued full notices to proceed for the drilling and subsea construction and installation contracts. The Sangomar field is developed by a joint venture comprising Woodside Energy (35% and operator), Cairn Energy (40% stake), FAR (12.5%) and Petrosen (10%). Requiring an investment of US$1.2bn, the Sangomar Field Development Phase 1 will target an estimated 230 Mboe and will consist of a FPSO vessel, with a capacity of around 100,000 bbl/d. First planned in 2021, its commissioning was delayed from 2022 to early 2023 in November 2019.

Earlier in March 2020, the British independent oil and gas company Cairn Energy said they planned to reduce and delay investment in the $1.2bn Sangomar Field Development Phase 1 project in Senegal. In 2020, the consortium is expected to spend less than US$330m on Sangomar, whereas US$400m was originally planned.