Australia’s FAR Ltd. has increased its stakes offshore Guinea-Bissau with plans to drill two exploration wells, and has gained a three-year extension for the area.
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Map from FAR. |
FAR and partner Svenska Petroleum Exploration struck a deal with the national oil company of Guinea-Bissau, Petroguin, to up their participating and paying interest in the the Sinapa and Esperanca licenses. FAR will now have a 21.42% interest in the permits, an increase from the 15% participating and keep its paying interests of 21.42% the same.
Svenska will have 19.28% stake in Sinapa and 70.71% in Esperanca.
“These changes reflect the fact that Petroguin will no longer have a participating interest in the joint venture prior to a commercial discovery,” says FAR. “Upon making a commercial discovery, Petroguin will have a reduced participating and paying interest of 10% and FAR and Svenska will respectively have interests of 19.28% and 70.71%.”
FAR says that the deal also brings new license terms that include more favorable arrangements for deepwater investment, with a reduction to production royalty rates payable to government.
“These changes to license terms are consistent with the joint venture’s new strategy to focus on the shelf edge areas of the Sinapa and Esperanca licenses, which display a similar geological setting to offshore Senegal and FAR’s enormous SNE field discovery,” says FAR.
The government has also granted the partners a three-year extension to further evaluate the newly acquired 3D seismic data offshore Guinea-Bissau, which will now end on 25 November 2020. During this time, the work obligation includes drilling one exploration well on each license with a minimum commitment on each of US$3 million.
According to FAR, the FAR/Svenska joint venture has previously mapped a 470 MMbbl prospect called Atum on the Guinea-Bissau shelf edge in a play similar to the large SNE discovery made by FAR and its Senegal partners in 2014.
“The changes in license terms give FAR a larger equity interest in Atum and the other prospects mapped to date in our Guinea-Bissau licenses and more importantly gives us an increased share and improved commercial terms in any deepwater discoveries that are made,” says FAR Managing Director Cath Norman. “These changes also give Far greater options for funding exploration drilling in Guinea-Bissau in the future.”
Since last week, FAR has been quite active in Africa.
On 31 March, FAR entered a two-year area of mutual interest agreement with CNOOC UK for licenses offshore Senegal and The Gambia that will see the partners evaluate, bid, negotiate and manage joint ventures on farmin and open acreage opportunities for oil and gas licenses.
Days prior, FAR’s joint venture partner and operator Cairn Energy made an oil discovery at the Vega-Regulus well, offshore Senegal.
The same day, FAR signed a farmin deal with Erin Energy to acquire 80% stake and operatorship of Blocks A2 and A5 in The Gambia.
In February, FAR said the company had identified more than 1.5 billion bbl of undrilled oil prospectivity in its acreage offshore Senegal through the interpretation of new 3D seismic data.
Read more:
CNOOC, FAR partner off Senegal, Gambia
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