FAR Ltd., Perth, has been awarded additional equity and improved deepwater terms in its Guinea-Bissau offshore permits.
Negotiations have been concluded with state-run PetroGuin EP revising the terms of the Sinapa and Esperanca licences. FAR now will have 21.42% participating and paying interest in both permits, an increase from the earlier 15% participating and 21.42% paying interests.
The changes have come about because PetroGuin will no longer have a participating interest in the combine prior to any commercial discovery.
In addition, when a commercial discovery is made, PetroGuin will take a reduced participating and paying interest of 10%. This will leave FAR and its combine partner Svenska Petroleum Exploration AB with respective 19.28% and 70.71% interests.
The renegotiated license terms also include more favorable arrangements for deepwater investment, including a reduction in the production royalty rates payable to the Guinea-Bissau government.
In light of FAR’s success further north in offshore Senegal with its SNE oil field discovery, the group has decided to focus on the shelf-edge areas of the Sinapa and Esperanca permits because of their similar geological setting to the SNE field region. The combine has previously mapped a prospect named Atum on the Guinea-Bissau shelf edge that has potential to hold 470 million bbl of recoverable oil. A number of other prospects and leads have been identified in the permits.
The Guinea-Bissau government has recognized this new focus by granting a 3-year extension to the current license terms to allow more time for FAR and Svenska to evaluate the newly acquired 3D seismic data in the area. The two licenses will now extend until the end of November 2020.
The work obligation includes one exploration well and a minimum expenditure commitment of $3 million in each permit.