FAR Ltd., Melbourne, declined its opportunity to pre-empt the sale of Cairn Energy’s 40% stake in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) contract area that contains Sangomar oil field offshore Senegal to Lukoil Upstream Senegal BV.
In line with the joint operating agreement between the Senegal joint venturers, the company was offered a pre-emptive right over the transaction. FAR noted fellow joint venturer Woodside Petroleum Ltd.’s pre-emption of the sale and that it had not made any objection to the transfer of 40% interest to Woodside instead of Lukoil (OGJ Online, Aug. 17, 2020).
The 30-day pre-emptive period for the transaction has now expired.
Far also said that Senegal state company Petrosen had decided to increase its stake in the Sangomar exploitation area to 18% from 10% and the transfer has been finalized.
Woodside’s pre-emption of the Cairn stake still requires government and Cairn shareholder approval, but if Woodside is successful the new division of working interest in Sangomar will be Woodside 68.33%, FAR 13.67%, and Petrosen 18%.
The working interest in the remaining RSSD contract area (including the FAN and SNE North oil discoveries) will be Woodside 75%, FAR 15%, and Petrosen 10%.
FAR remains in default of its payments to the RSSD JV with an effective date of June 23. The June, July, and August calls are currently unpaid and total $28.2 million with an accrued interest of $0.07 million. FAR has 6 months from the default date to make good its payments plus interest.
The company had cash reserves of $63.4 million as of July 31.
Cathy Norman, FAR managing director, said that because of the COVID-19 crisis and related oil price crash, the company is continuing to look for a buyer for all or part of its stake in lieu of financing its share of Sangomar field development.