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The Moroccan partner is expected to provide It said it was still engaging with other likely
partial financing for the plant by subscribing farm-in partners, however.
for over 159.7mn shares in Sound for GBP2mn “Today’s placing and the announcement of
($2.5mn), the UK company said at the time. It an opportunity for existing shareholders to par-
could also provide a $13.5mn commercial loan. ticipate under the same terms and conditions
According to Sound, the future contract is provides Sound with a stronger financial base to
expected to cover the supply of 100mn cubic progress our planned activities,” CEO Graham
metres per year of gas over a 10-year period, Lyon commented. “We have confidence in our
with a take-or-pay commitment of 90 mcm per strategy to bring Sound into a cash generating
year. The price of this gas will range between $7 position and look forward to updating the mar-
and $9 per mmBtu. ket as future milestones are met.”
In its statement last week, Sound also noted Sound has a 47.5% stake in Tendrara, while
that it had ended discussions with a potential US oilfield services giant Schlumberger holds
farm-in partner for its operations in eastern 27.5% and Morocco’s state-owned resources
Morocco. agency ONHYM owns 25%. ™

Woodside may pre-empt Cairn’s

sale of Sangomar stake to Lukoil

SENEGAL AUSTRALIA’S Woodside Energy indicated last The RSSD joint venture also includes Pet-
week that it might seek to block Russia’s Lukoil roSen, the national oil company (NOC) of Sene-
from acquiring a stake in RSSD, the consortium gal, which has a 10% stake. PetroSen is not likely
set up to develop the Sangomar block offshore to give up its holdings in the project.
Senegal. The Sangomar block includes three sepa-
Woodside, the operator of RSSD, informed rate fields – Rufisque, Sangomar Offshore and
Reuters that it had not ruled out exercising Sangomar Deep Offshore – that give the RSSD
its right to pre-empt the sale of the stake now joint venture its name. Woodside and its part-
owned by Cairn Energy (UK). “Woodside will ners discovered oil there in 2014 and have said
consider all its options,” a company spokes- that the block holds around 645mn barrels of
woman said. oil equivalent in recoverable reserves, including
Cairn’s plan is “subject to joint venture (JV) 485mn barrels of crude oil and 160mn boe of
and government approvals,” she added. She natural gas.
was speaking after Lukoil revealed that it had RSSD has said that it hopes to begin extract-
offered to pay $400mn offer for a 40% stake in ing oil from Sangomar in 2023. The cost of
Sangomar. developing the block is likely to top $4.2bn. ™
If Woodside pre-empts the sale of Cairn’s
holdings in the block, it will increase its stake
from 35% to 75%. In excluding Lukoil, it may
also manage to avoid US sanctions on Rus-
sia. The current sanctions regime provides for
Washington to impose penalties on companies
that join Lukoil and other major Russian opera-
tors for deepwater oil development projects.
Saul Kavonic, an analyst for Credit Suisse,
told Reuters last week that he did expect the
Australian company to exercise its option to
buy out its non-operating partner. “We think
Woodside is interested in increasing its stake
in Sangomar and may prefer a different JV
makeup, so [it] may seek to pursue rights to pre-
empt or challenge the sale,” he commented.
Cairn is not the only member of the RSSD
venture that is seeking to unload its stake in
Sangomar. Australia’s FAR has announced plans
to sell its 15% holding but has not named any
potential buyers. When contacted by Reuters, it
declined to say whether it had held any discus-
sions with Lukoil. The block holds about 645mn barrels of oil equivalent (Image: FAR)

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