Woodside gets green light for $6 billion Senegal oil project

Australian oil and gas producer Woodside has won approval from the Senegalese government to develop the nation’s first oil project, clearing the way for final investment decisions to proceed.

The first phase of the $6 billion Sangomar offshore oil field project would develop 230 million barrels, with first oil targeted for early 2023 at a production capacity of 100,000 barrels a day, Woodside said.

The Sangomar oil discovery by FAR off the coast of Senegal was the biggest of 2014.
The Sangomar oil discovery by FAR off the coast of Senegal was the biggest of 2014.

ASX-listed Woodside and its joint-venture partners will be able to start construction after the government of Senegal executes the Host Government Agreement and awards and approves key contracts, Woodside said in a statement on Thursday.

The joint-venture partners in the project – Woodside, ASX-listed Far Limited, Capricorn Senegal Limited and Senegal state-owned oil company Petrosen – are eager to press ahead with the project. Financing for the project has faced delays due to an arbitration sought by FAR Limited, which owns a 15 per cent interest in the project. FAR challenged Woodside’s acquisition of a 35 per cent holding from ConocoPhillips in 2016.


Woodside on Thursday said the government of Senegal had also approved a proposed plan for the exploitation of oil at three offshore joint-venture projects – Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore.

The approval comes as a final investment decision on another major Woodside project, the Scarborough gas field development, also edges closer after the company and its joint-venture partner BHP announced a deal to process gas at Woodside’s Pluto LNG facility in November.

Woodside and BHP, which has a 25 per cent stake in the Scarborough field off WA’s Pilbara coast, have inked a non-binding agreement that would see BHP make a decision on the project by mid-2020.

Woodside shares were down marginally at $35.85 at midday.

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