Cairn: Senegal Oil First, Gas Maybe Later
UK-based Cairn has outlined its plans for a major oil development offshore Senegal, noting that gas could be developed for export in a later phase.
Concept selection for its Senegal SNE oil and gas development and engagement with major contractors has begun, said Cairn, prior to formal tendering for a floating production ship (FPSO) and subsea infrastructure later this year. This follows 11 wells drilled in three years, including this year’s now-complete campaign of five wells.
Commenting in its first half 2017 report on August 22, the UK independent estimates that the first phase of the SNE development will target about 240mn barrels oil, with an initial target plateau of 75,000-125,000 b/d dependent on FPSO capacity, from up to 25 wells (oil producers, water and gas injectors), with first oil targeted from 2021 to 2023.
The current SNE plan assumes gas re-injection only during initial development, but with potential for gas export in later phases; it estimates that the SNE field holds more than 1 trillion ft³ recoverable non-associated gas and 0.3 trillion ft³ of associated gas. It did not detail how such gas might be exported, but Kosmos and BP much further north offshore Senegal are eyeing an LNG development that would start up in 2021.
It said that transfer of operatorship to Woodside for the development phase is planned to take place in 2018, with Cairn to continue exploration activities on the acreage. It said the joint venture, also including Australia’s FAR and PetroSen, plan to submit an evaluation report and exploitation plan to the Senegal government in 2018, with front end engineering and design also planned to commence next year with a final investment decision targeted before end-2018. But FAR has taken ConocoPhillips to arbitration over the transfer of its stake to Woodside, saying that FAR's pre-emption rights were not respected.
In Western Sahara, Cairn began acquisition of 3D seismic with operator, Kosmos Energy, following a new petroleum agreement in 2016 reached with Morocco, which annexed the territory in the 1970s. The company is also engaged in ongoing Norway, UK, Ireland and Mexico exploration – and in the Skarfjell development in the Norwegian Sea among others.
“In Senegal, planning work has commenced on the phased development of the world class SNE field,” said Cairn CEO Simon Thomson said. He added: “In the [UK] North Sea, Kraken has commenced production and Catcher is scheduled for first oil later this year.”
Cairn reported a 1H 2017 net profit of $314mn, compared with losses of $38mn in the same period last year and $95mn in 2H 2016.
Mark Smedley