Senegal’s energy hub ambitions gather pace
Two big hydrocarbons projects are heading for FID with Woodside stepping up to take operatorship of the SNE development
Senegal's efforts to fast-track its first major hydrocarbons developments seem to be paying off. Both the SNE and Tortue/Ahmeyhim projects are on course for a final investment decision (FID) in coming months, with first production expected in the early 2020s.
BP has confirmed that it still planned to make an FID on the Tortue/Ahmeyhim gas development, which is shared with Mauritania and straddles its maritime border, by the end of December. The project moved to the front-end engineering and design (FEED) stage in April, and first gas is due in 2022.
The progress suggests that an agreement thrashed out earlier this year between Senegal and Mauritania, under which they would split early income from Tortue/Ahmeyhim, is holding up. The countries agreed to renegotiate in five years when a clearer picture emerges on the quantities of gas on each side.
The first phase involves the export of 2.5m tonnes a year (t/y) of liquefied natural gas (LNG) via a floating LNG vessel, likely to be supplied by Golar LNG, based on reserves estimated at more than 15 trillion cubic feet.
BP says the project could be expanded to as much as 10m t/y later, if the gas resources are there to support it. BP's partner Kosmos Energy has estimated that the wider Greater Tortue Complex could hold more than 25 trillion cf.
BP has a stake of around 60% in the blocks being developed in each country, while Kosmos , which made the discoveries on which the project is based, has around 30%. State oil companies Petrosen and Mauritania's SMHPM hold the other 10% stakes within their own waters. While BP is heading the production project, Kosmos remains the guiding hand in continuing exploration efforts.
Woodside takes over at SNE
Meanwhile, the SNE development, located off central Senegal, around 100km from the capital Dakar, is gathering momentum. Outgoing operator Cairn Energy said in late October that government approval is targeted by year-end. Assuming that is forthcoming, FID is scheduled for early 2019.
Crucially for the project, Australia's Woodside has now exercised its option to take over operatorship. Cairn, which holds 40% of the development, said transfer procedures were well under way and only government consent was needed to complete it.
Woodside had been earmarked to take over operatorship of the SNE development since it agreed to buy Conoco Phillips' 35% stake in the project in 2016. But the transfer was held up, in part, by a legal challenge to the sale by Australia's Far, which pioneered exploration in the region and still holds 15% in the project.
Far said it wasn't given fair opportunity to exercise its pre-emption rights over the stake sale, a claim then taken to an International Court of Arbitration. In its half-year accounts, published in late August, Far said a court decision wasn't expected until late 2019.
However, Woodside's decision to assume operatorship suggests the legal proceedings are no longer regarded by the joint venture as a show stopper.
The development plan foresees production of 100,000 barrels a day of oil based on around reserves of around 500m barrels, using up to 23 subsea oil production, water injection and gas injection wells tied back to a floating production, storage and offtake vessel (FPSO). FEED is expected to be launched before the end of the year. First oil production is scheduled for 2022 with further expansion phases possible later.
While predominantly an oil play, SNE is also expected to supply associated gas to the Senegalese domestic market—Far says that could happen by 2024.
The country's president, Macky Sall, is keen to ensure that the two projects are not purely export plays and that the domestic power and industrial sectors benefit. Gas from Tortue is also planned to serve the domestic markets in Senegal and Mauritania via pipeline from the development's FPSO, though this is not part of BP's first phase project.
Far out in the Gambia
With SNE now being run by larger players, Far has turned its attention to further exploration both in Senegal and the surrounding region. In late October, the company and joint-venture partner Petronas spudded the Samo-1 exploration well on block A2 in the waters of The Gambia, to the south of the blocks that yielded the SNE finds in neighbouring Senegal.
This is the first offshore well to be drilled in The Gambia for four decades, according to Far. Samo-1 well is being drilled in water 1,000m deep to a planned depth of some 3,100m.
The Gambia is pushing to take advantage of the interest and infrastructure in Senegal to kickstart its own oil and gas industry. Far estimates the Samo prospect has two key reservoir intervals and could contain combined prospective resource of 825m barrels of oil.