AUSTRALIA’S Woodside Petroleum has underlined its confidence in a deepwater field off Senegal, operated by Edinburgh-based Cairn Energy, by acquiring a 35 per cent stake in the prospect for US $430 million (£322m).
Woodside, Australia’s biggest independent oil and gas company, acquired the stake from ConocoPhillips, the Houston energy giant which is seeking exit deepwater exploration by the end of 2017.
Shares in Cairn – which holds a 40 per cent stake covering three blocks offshore Senegal – closed down more than three per cent at 199.3p, amid reports the asset took a material hit with the Woodside deal.
But that is unlikely to dent confidence in what is reported to be a one-billion-barrel resources.
Woodside has agreed to acquire 100 per cent of the shares in ConocoPhillips Senegal BV, which holds a 35 per cent working interest in three offshore exploration blocks – Sangomar Deep, Sangomar and Rufisque.
The production-sharing contract includes the SNE and FAN deepwater oil discoveries.
Woodside noted SNE was one of the largest deepwater discoveries of 2014, and estimates it contains 560 million barrels of recoverable oil.
Woodside chief executive Peter Coleman said the acquisition has given the company a significant position in an under-explored and highly prospective emerging oil province.
Mr ColemanHe 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.
“It builds on our agreement to acquire a 65 per cent% interest in the AGC Profond exploration block, located to the south in the Senegal- Guinea Bissau joint development zone and extends our regional focus in West Africa,” Mr Coleman added.
“Woodside will bring to the joint venture expertise in deepwater drilling, development and operation of subsea infrastructure and floating production storage and offloading vessels.”
Edinburgh-based Cairn made no official comment yesterday.
But it highlighted the potential of the find it made in May, when chief executive Simon Thomson said the four appraisal wells drilled on SNE-1 discovery “confirmed the scale and potential of this world-class asset.”
Mr Thomson said at the time: “We are delighted with the results to date of the multi-well evaluation programme, which has confirmed the scale and potential of this world class asset.”
At the time, analysts at joint house broker JP Morgan Cazenove said the results of the latest well meant it was likely Cairn would increase its central estimate of the find, which it had put at from 385m barrels.
It is understood Cairn has welcomed Woodside as a partner in the prospect, given its deepwater experience.
Cairn is expected to update investors on the Senegal blocks when it reports its half-year results in August.
In addition to the stakes held by Cairn and now ConocoPhillips, FAR Limited has a 15 per cent stake in the three blocks.
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