Petronas Farms into Gambia Blocks
Malaysian state producer Petronas is to farm into blocks A2 and A5 offshore Gambia.
Australian independent FAR said February 26 it has agreed to farm out a 40% interest in each of the ‘’highly prospective’’ two offshore blocks to Malaysia. FAR will retain a 40% interest in each block. New York- and Johannesburg-listed Erin Energy will retain the remaining 20% interests in each.
The A2 and A5 blocks offshore Gambia, covering 2,682km2, lie at water depths of 50m-1,500m. They are adjacent to world-class field SNE offshore nearby Senegal, which hold more than a billion barrels of oil and some gas and in which FAR holds a 15% interest.
In exchange for the A2 and A5 interests and reimbursing back costs, Petronas will pay FAR $13.5mn cash by March 31 2018 at the latest and will also pay 80% of estimated costs to drill Samo-1 exploration well, knowing that these costs amount to $45mn. It will also fund FAR’s share of non-well costs up to $1.5mn.
Still under the farm-out agreements, FAR will continue to operate the two blocks concerned throughout exploration and drilling of Samo-1 well which is expected to hold 825mm bbls oil. Once development is reached however, Petronas will have the right to become operator as the Australian relies on its experience in deep-water development upon discovery.
“This farm-out deal with Petronas is further recognition of the value of our Gambian licences and FAR’s status as a partner of choice in the Mauritania-Senegal-Guinea-Bissau-Conakry Basin”, said FAR managing director Cath Norman.