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FAR Ltd signs crude oil offtake deal with Glencore; awards development drilling contract

The binding MoU provides FAR with access to the extensive marketing and offtake resources of one of the world’s leading marketers of crude oil.

FAR Ltd - FAR Ltd signs crude oil offtake deal with Glencore; awards development drilling contract
The offtake is expected to be for a period of seven years following first oil

FAR Ltd (ASX:FAR) has signed a binding memorandum of understanding (MoU) with Glencore Energy (UK) Ltd for the full allocation of FAR’s share of crude oil from the Sangomar Field offshore Senegal.

Glencore Energy (UK) is a subsidiary of Glencore PLC (LON:GLEN), one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities.

The binding MoU between FAR and Glencore, which is subject to the negotiation of final documentations, provides FAR with access to the extensive marketing and offtake resources of one of the world’s leading marketers of crude oil.

FAR will benefit from Glencore’s global network and multi-decades expertise in the oil and gas landscape, including access to Glencore’s track record in successfully creating markets for new qualities of crudes, thereby maximising the intrinsic value of the Sangomar barrels.

The offtake is expected to be for a period of seven years following first oil with a minimum of 20 million barrels (representing FAR’s share of the project) expected to be produced during that time.

Development activities commence

FAR, along with its partners in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture, last week signed the FID (final investment decision) statement for the Sangomar Field development.

Following the signing, the full notice to proceed (FNTP) has been issued to the key contractors for commencement of the development.

Orders have been placed for long lead items for the drilling and related completions, with drilling planned to commence at the end of Q1, 2021.

Development drilling contract awarded

Diamond Offshore has been awarded the contract for the development drilling, including an additional evaluation well on either the FAN or SNE North discoveries, prior to the commencement of the development drilling.

The final location will be chosen during 2020 following the processing and interpretation of the recently acquired 3D seismic data over the development, FAN and SNE North areas.

The processing of this new data is progressing to schedule.

Work continues on plans for development of the gas in the Sangomar Field and a concept select decision is likely to be made by the JV in Q3 of this year.

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