Page 8 - AfrOil Week 18 2020

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 Nevertheless, it said, the company is contrac- tually obligated to execute the 2020 work pro- gramme for the project and to cover its $163mn share of the budget for that work programme.
“FAR recognises that it is unlikely to be able to fund its future share of the substantial project commitments based on its current cash reserves andfutureequityraisesalone,”itsaid.“ epro- cess has commenced to sell all or part of the FAR working interest and investigate alternative sources of nance.”
e Australian company did not name any potential buyers or alternative sources of fund- ing. It did say, though, that RSSD’s shareholders were in discussions with their contractors on the prospects for cutting capital expenditures and postponing certain investments in order to reduce pressure on cash ow. “ e Sango- mar development was running $117mn under budget for the year to [the] end of March, and we expect this trend to continue,” it added.
Cath Norman, FAR’s managing director, commented: “ e key challenge for FAR over the coming weeks is managing the fallout of the COVID-19 epidemic and oil price rout with respect to our ongoing commitment to the San- gomar Field Development and associated work programme and budget approved for 2020 ... Progressing a sell-down of FAR’s working inter- est in Senegal or arranging alternative nancing for FAR’s share of the development and at the same time preserving cash and shareholder value in our assets remain clear objectives of the board at this time.”
FAR’s share of costs at Sangomar is antic- ipated to reach $492mn. Earlier this year, the company said it had secured $300mn in loans under an agreement with BNP Paribas (France), Glencore (UK-Switzerland) and Mac- quarie Bank (Australia). In late March, though, it revealed that the lenders were reluctant to proceed.
FAR has a 15% stake in the RSSD joint ven- ture. The group also includes PetroSen, the national oil company (NOC) of Senegal, Cairn
PERFORMANCE
Nigeria incurs further refining losses in January
Energy of the UK and Woodside Energy of Aus- tralia. Equity in the project is divided between Woodside, the operator, with 35%; Cairn, with 40%; FAR, with 15%, and PetroSen, with 10%.
e Sangomar block includes three separate elds – Ru sque, Sangomar O shore and San- gomarDeepO shore–thatgivetheRSSDjoint venture its names. e partners found oil there in 2014 and have determined that the block holds an estimated 645mn barrels of oil equiv- alent (boe) in recoverable reserves, including 485mn barrels of crude oil and 160mn boe of natural gas.
Woodside and its partners made a final investment decision (FID) on the Sangomar project earlier this year. Shortly afterwards, Woodside instructed its contractors to move forward with drilling, installation and subsea construction work at the block.™
The Sangomar block includes three elds (Image: Woodside Energy)
NIGERIA
NIGERIA’S ageing re neries posted a combined loss of NGN9.6bn ($25mn) in January, accord- ing to data disclosed by their operator, Nigerian National Petroleum Corp. (NNPC).
The plants in Kaduna, Port Harcourt and Warri similarly booked losses during most months in 2019. ey incurred a total loss for last year of NGN149.2bn, Nigerian daily e
Punch reported. Revenues came to NGN69bn, but expenses totalled NGN218.2bn.
e two Port Harcourt re neries accounted for NGN4.4bn of the losses in January, while the Kaduna and Warri plants incurred losses of NGN2.1bn and NGN3.1bn.
Nigeria is scrambling to cut state costs fol- lowing the collapse in oil prices. 
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w w w . N E W S B A S E . c o m Week 18 06•May•2020