Woodside raises Sangomar cost estimate
Australia’s Woodside, the energy company leading the Sangomar field development phase 1 project, on July 18 announced an increase in costs and a revised schedule for the project.
The cost and schedule review was prompted by the identification of remedial work required on the project's floating production storage and offloading (FPSO) facility. This development has led to a projected cost increase of 7-13% from the previous estimate, bringing the total project cost to an estimated range of $4.9bn to $5.2bn, up from the initial estimate of $4.6bn.
The revised target for the first oil production from the Sangomar field is now set for mid-2024, reflecting the necessary adjustments to accommodate the remedial work.
Woodside CEO Meg O'Neill said that the safe completion of all activities remains the highest priority for the project team.
“We have taken the prudent decision to have the remedial work conducted while the FPSO remains at the shipyard in Singapore,” she said. “This minimises the impact to the project schedule as it is safer, more efficient and more cost effective than undertaking the work offshore Senegal. This approach ensures we can achieve production startup in line with the adjusted schedule and ramp up operations as planned.”
The cost increase and adjusted schedule, Woodside said, will not affect the company's production guidance for 2023. The company's output forecast for 2023 is at 180-190mn boe.
The overall project was 88% complete at the end of June. The subsea installation campaign was 76% complete, with the subsea work scope 95% complete. The development drilling programme continues with 12 of 23 wells drilled and completed, Woodside said.
The Ocean BlackHawk drillship successfully completed its work scope in July and the remaining drilling activity will be completed by the Ocean BlackRhino.
Although primarily an oil production project, Woodside also envisions exporting commercial quantities of natural gas to the shore. Woodside completed the acquisition of the entire participating interest of Sydney-listed Far in the RSSD joint venture in early July 2021.