Sangomar debt talks collapse - FAR
PERTH (miningweekly.com) – Debt funding arrangements for the Sangomar joint venture (JV), offshore Senegal, have collapsed, ASX-listed FAR said on Tuesday.
The company noted that the Covid-19 pandemic, combined with the precipitous fall in the Brent oil price by over 60% since January this year, had adversely impacted global financial markets, including the availability of credit.
FAR said that the company’s ability to close the Sangomar project debt arrangement, which has been ongoing, has been compromised, with the lead banks to the senior facility having now confirmed that they could not complete the syndication in the current environment.
“The board is of the opinion that, in addition to the senior debt facility, neither the junior nor mezzanine facilities that were being arranged will be able to be completed for the foreseeable future,” FAR told shareholders, noting that at the end of February, the company had some A$150-million cash at bank, with no debt.
JV partner Woodside told Mining Weekly Online on Tuesday that work on the Sangomar Phase 1 development commenced early in 2020, and that Woodside is taking early action to proactively manage the emerging impacts of Covid-19 on the supply chain and project schedule.
“We are working with contractors, the government of Senegal and our JV partners to evaluate options to reduce total cost and near-term spend whilst protecting the overall value of the investment,” a spokesperson said.
The Sangomar development concept is a standalone floating production storage and offloading facility with 23 subsea wells and supporting subsea infrastructure, with the facility expected to have a production capacity of 100 000 bbl/d, and would process the oil before it is exported to market via tanks.
FAR earlier this week announced the settlement of a dispute with Woodside in the International Court of Arbitration, with both parties agreeing to withdraw their respective claims and bear their own fees and expenses for the arbitration.
FAR has previously claimed that it was not provided with proper pre-emptive rights over assets it held in JV with ConocoPhillips Senegal, prior to that company’s 2016 deal with Woodside in which Woodside acquired ConocoPhillips’ interest in Senegal for a purchase price of $350-million.
Comments
The
functionality
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation