MELBOURNE, Australia – FAR and partner Svenska Petroleum Exploration have concluded negotiations with Petroguin, the national oil company of Guinea-Bissau, on revisions to the terms of the offshore Sinapa and Esperanca licenses.
Under the new arrangements FAR will have a 21.42% participating and paying interest, compared with the previous 15%.
These changes reflect the fact that Petroguin will no longer have a participating interest in the joint venture prior to a commercial discovery.
If a commercial discovery follows, Petroguin will hold a participating and paying interest of 10%, with FAR and Svenska respectively having 19.28% and 70.71%.
The new terms include more favorable arrangements for deepwater investment such as a reduction in production royalty rates payable to the government.
FAR says the joint venture’s new strategy is to focus on the shelf edge areas of the two licenses which display a similar geological setting tooffshore Senegal and the deepwater SNE field discovery, in which FAR is also a partner.
In order to evaluate newly acquired 3D seismic data offshore Guinea-Bissau, the joint venture has secured a three-year extension to the current license periods, now ending on Nov. 25, 2020.
The work program involved drill one exploration well on each license with a minimum expenditure commitment for each license of $3 million (gross). The changes remain subject to government decree.
FAR Managing Director Cath Norman said: “The FAR and Svenska joint venture has previously mapped a 470-MMbbl prospect called Atum on the Guinea-Bissau shelf edge in a play similar to the large SNE discovery…
“The changes in license terms give FAR a larger equity interest in Atum and the other prospects mapped to date in our Guinea-Bissau licenses, and more importantly, gives us an increased share and improved commercial terms in any deepwater discoveries that are made.
“These changes also give FAR greater options for funding exploration drilling in Guinea-Bissau in the future.”