Partners in Guinea-Bissau blocks preparing to drill first ever deepwater well

Svenska Petroleum has reached an agreement with CNOOC to farm out its operated Sinapa and Esperança Licences located offshore Guinea-Bissau. FAR Limited, a partner in these licenses, has approved the request for transfer of interest from Svenska to CNOOC and the JV is preparing to drill the first ever deepwater exploration well offshore Guinea-Bissau in 2020.

Source: FAR Limited

SPE Guinea Bissau AB (Svenska GB), a wholly owned subsidiary of Svenska Petroleum, is the operator of Block 2, the Sinapa Licence, and Blocks 4A & 5A, the Esperança License, offshore Guinea-Bissau.

Other co-venturers in these licences are FAR Limited and Empresa Nacional de Pesquisa e Exploração Petrolíferas, E.P. (Petroguin, the state owned oil company).

Svenska said on Monday that the transaction is subject to regulatory approvals, which are currently being progressed. The farm-in will occur when a decree of the Council of Ministers approving the transaction has been promulgated.

As part of the agreement, CNOOC will acquire a 55.5555% participating interest in these frontier exploration licenses for the exploration phase, which will convert into a 50% participating interest in each of the licenses in the event of a commercial discovery.

Svenska GB will continue to operate the frontier exploration licenses for the exploration well scheduled for drilling in first quarter of 2020. Subject to receiving regulatory approvals, the transaction is expected to close in the third quarter of 2019.

In a separate statement on Tuesday, FAR Limited said it had approved the request for transfer of interest from Svenska Petroleum of a 55.55% participating interest in the highly prospective Sinapa and Esperanca petroleum licenses offshore Guinea-Bissau, to CNOOC.

FAR will retain its 21.42% participating interest in each of the licenses.

Svenska will retain a reduced 23.03% participating interest and will continue to act as operator while CNOOC, upon conclusion of the upcoming offshore drilling campaign, may elect to assume operatorship. Completion of the farm-out agreement is not subject to pre-emption rights.

 

‘First ever deepwater well’

 

FAR said that the JV is preparing to drill the first ever deepwater exploration well offshore Guinea-Bissau in the first quarter of 2020.

The Sinapa permit has two discoveries, with light oil having been recovered to surface from both those locations. The most significant of the two being the Sinapa discovery with contingent resources of ~13.4MMbbls of recoverable light oil (unrisked, 2C case, 100% basis).

According to FAR, the Joint Venture is advancing preparations for drilling of the Greater Atum prospect in early 2020, which will be the first offshore exploration well drilled since 2007 and the first ever deepwater exploration well offshore Guinea-Bissau.

The Greater Atum prospect is a recognized shelf-edge play analogue of the giant SNE oil field offshore Senegal and has a best estimate prospective resource of 471mmbbls (gross, unrisked).

FAR’s Managing Director, Cath Norman, said: “We look forward to progressing the Guinea-Bissau acreage now that CNOOC have farmed into the project. Attracting a National Oil Company such as CNOOC shows the confidence that another major company has in FAR’s Guinea-Bissau acreage. CNOOC brings a wealth of technical and operational expertise and experience and we look forward to finalising the details of the future drilling plans that are expected to begin early 2020. We welcome CNOOC to the Joint Venture and look forward to a long and successful relationship.”


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