SENEGAL: FAR to Focus on RSSD Assets Sale, Turns Down Pre-emptive Right

FAR has advised Cairn that FAR does not intend to pre-empt the transaction or object to the proposed transfer of Cairn’s working interest in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore RSSD Contract Area to Lukoil. FAR says it was offered a preemptive right over the sale of the 40% working interest held by Capricorn Senegal Ltd (a wholly owned subsidiary of Cairn Energy plc, pursuant to the Joint Operating Agreement between the Senegal co-venturers but will instead concentrate on progress a sale of all or part of its working interest. The thirty-day pre-emptive period for the transaction has now expired.

Woodside and State oil company Petrosen have exercised their pre-emptive rights and the sale of Cairn’s working interest is still subject to Cairn shareholder and Government of Senegal approval. Petrosen increase in its stake in the Sangomar
Exploitation Area from 10% to 18% has been finalised. If Woodside successfully acquires Cairn’s interest, the working interest of the remaining joint venture partners in the Sangomar exploitation area will be Petrosen 18%, FAR 13.67%, and Woodside 68.33%.

The working interest in the remaining RSSD evaluation area (including the FAN and SNE North oil discoveries) will be Petrosen 10%, FAR 15% and Woodside 75%.

FAR remains in default of its payments to the RSSD joint venture, with the effective date of 23 June 2020 with the June, July and August cash calls currently unpaid and total US$28.2M. The interest accrued to date on these payments is US$0.07M. As at 31 July 2020 FAR says it had had cash of US$63.4M with 6 months from the date of default to make good its payments (plus interest) to the joint venture to come out of default. The company hopes it sale of all or part of its working interest with enable it clear any unpaid payments.

FAR’s Managing Director, Cath Norman said, “It is pleasing to see the operator, Woodside, and Petrosen showing their support for the Sangomar Field development by increasing their working interest in the project. Unfortunately, due to the COVID crisis and related rout in oil price, FAR continues to pursue a sale of all or part of FAR’s stake in lieu of concluding financing for the development. The Cairn sale is a sign that there is international appetite for this world class project, even during challenging times.