Woodside Acquires Cairn's Stake in Senegal Project
Australia’s Woodside has acquired Cairn’s entire stake in the Rufisque, Sangomar and Sangomar Deep (RSSD) blocks offshore Senegal, it said on December 23.
The purchase price was US$300mn plus a working capital adjustment of US$225mn, which included a reimbursement of Cairn’s development capital expenditure incurred since January 1 this year. Additional payments of up to US$100mn are contingent on commodity prices and the timing of first oil, Woodside said.
“The development of Sangomar is being executed according to schedule. The Senegal team recently achieved another milestone, with the award of the contract for the operations and maintenance of the floating production storage and offloading vessel which is targeted for delivery and first oil production in 2023,” Woodside CEO Peter Coleman said.
Woodside recently used its pre-emptive right to make a bid for fellow Australian player Far's stake in the block. India’s ONGC launched its bid to buy Far's 13.7% interest in the Sangomar exploitation zone containing the Sangomar field and its 15% position in the surrounding RSSD contract zone in mid-November. But Woodside has matched the offer, agreeing to pay Far $45mn and reimburse its share of working capital from January 1, as well as make contingent payments up to a $55mn cap.
“The completion of the transaction with Cairn has simplified the structure of the joint venture ahead of our planned equity sell-down in 2021. The Sangomar development is an attractive, de-risked asset that offers near-term production to potential buyers,” Coleman said.
Woodside’s participating interest in the RSSD joint venture has increased to approximately 68.33% for the Sangomar exploitation area and to 75% for the remaining RSSD evaluation area. Woodside’s interest will further increase to 82% for the Sangomar exploitation area and to 90% for the remaining RSSD evaluation area subject to completion of the Far acquisition. Woodside will remain the operator.