Senegal: Australia’s FAR raises $300 million to finance its share of the Sangomar oil project

The Australian junior FAR announced on Monday 20 January that it has secured a loan of 300 million dollars to finance its commitments in the offshore Sangomar project, Senegal’s first oil development block.

With a 15% stake, the company is present alongside Woodside Energy (35%), Cairn Energy (40%) and the Senegalese state company Petrosen (10%). The facility is a syndicated loan underwritten by financial institutions Macquarie Bank and BNP Paribas as well as Swiss commodity trading giant Glencore, with each of the lenders contributing USD 100 million on a round robin basis. As for the borrowing terms, « the facility has a seven-year maturity and is calculated at 7.75% above LIBOR (London Inter Bank Offered Rate), » the company said in its press release. FAR’s announcement follows the recent green light given by the Senegalese authorities to the project, a set of offshore exploration blocks, piloted by the operator Woodside, which should eventually have a production capacity of 100,000 barrels per day. A final point remains to be settled, the dispute between FAR and its compatriot Woodside, the latter having acquired in August 2016 - for $430 million - the 35% interest held by the American ConocoPhillips in the project while the Australian junior has a right of first refusal on it. In Africa, in addition to Senegal, FAR is also active in Gambia, Guinea-Bissau and Kenya.

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Location of the Sangomar oil fields off the coast of Senegal. Credit: FAR