Conoco sells Senegal business to Woodside

July 14, 2016

Australia's Woodside Energy has agreed to acquire all US oil firm ConocoPhillips' assets offshore Senegal, West Africa, for US$430 million.

The move sees Woodside, which has been increasing its Atlantic Margin position, take a stake in an area which has seen some of the world's largest recent offshore discoveries. These include the deep water, basin opening SNE discovery, made in 2014, and estimated to contain 560 MMbbl recoverable oil. 

FAR Ltd, a partner in the SNE discovery, made by Cairn Energy and also known as Shelf Edge, said this April that SNE's resources justified "a significant commercial development." The comments, including the 560 MMbbl estimate, came before the results of recent successful appraisal wells in the area.

Woodside says there is "line of sight to near-term oil production" on the acreage, which is covered with 4000sq km of 3D seismic data, with "significant future exploration upside." The firm says the move "builds [its] regional position in Atlantic Margins" and will leverage its capabilities in deep water drilling, subsea infrastructure and floating production vessels. 

The deal, which would be back dated to 1 January 2016, will see Conoco paid $350 million, then $80 on completion, for 100% of the shares in ConocoPhillips Senegal, which holds a 35% working interest in a production sharing contract (PSC) with the Government of Senegal covering three offshore exploration blocks, Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore. The PSC includes the SNE and the FAN deep water oil discoveries. 

Woodside earlier agreed to acquire 65% interest in the AGC Profond exploration block to the south in the Senegal-Guinea Bissau joint development zone in West Africa and earlier this year it was awarded license options in the Irish Offshore 2015 Atlantic Margin round. 

Woodside CEO Peter Coleman said: “We are taking advantage of our balance sheet to acquire a world-class asset that fits well with our capabilities, offers significant future upside in exploration and line-of-sight to near-term oil production.

“We look forward to working with the Government of Senegal and joint venture participants Cairn Energy, FAR, and Petrosen, the Senegal National Oil Company, to progress the commercial development of SNE and any future discoveries."

It is likely that a development will be a subsea project tied back to a floating production vessel. Woodside has an option to become operator for the development and production phases.

Completion of the deal is subject to conditions, including Government of Senegal approval. Woodside says it is targeting deal close by year-end 2016.

Read more

SNE justifies "significant commercial development"



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