Woodside Petroleum Progresses Towards The Development Of Senegal’s First Oil Project

Australia’s leading independent oil and gas company Woodside Petroleum Limited (ASX: WPL) made an announcement on 17 December 2018 regarding the commencement of Front-End Engineering Design (FEED) activities for the development of Senegal’s first oil project. Following this news, the share price of WPL decreased by 0.064 percent as on 17 December 2018.

The company informed that the Rufisque Offshore, Sangomar Offshore, and Sangomar Deep Offshore (RSSD) joint venture has agreed to begin the FEED activities following the award of the subsea FEED contract to Subsea Integration Alliance for the SNE Field Development-Phase 1 offshore Senegal. Under the feed activities, the company will finalize the costs and technical definition for the proposed development to enable a final investment decision.

According to Woodside CEO Mr. Peter Coleman, the decision to begin FEED activities was a significant step towards the development of Senegal’s first oil project. He further added that the company is planning to progress the SNE development towards the earliest possible commercialization of the discovered resources.

The RSSD joint venture will keep on working with the Government of Senegal, local communities and the company’s contractors to realize the potential opportunities and benefits from this nationally significant development.  The SNE development concept is stand-alone floating production storage and offloading vessel (FPSO) facility with supporting subsea infrastructure, and it will be designed to allow subsequent SNE development phases.

Phase 1 of the development is going to target an estimated 230 million barrels of oil resources from the lower, less complex reservoirs and an initial phase in the upper reservoirs. It is expected that the FPSO will have a capacity of around 100k barrels per day, with first oil production targeted in 2022.

In the September quarter, the company reported an exploration and evaluation expense of $53 million and capital expenditure of $281 million. The total sales revenue in the September quarter was $1,292 million which was $1,146 million in the previous corresponding period.

In the first half of FY 2018, the company reported revenue of $2,388 million which was 27 percent higher than the first half of FY 2017. The net profit for the period attributable to members increased by 6 percent to $541 million in H1 2018 as compared to H1 2017. The operating cash flow of the company rose 25 percent to $1,540 million in H1 2018 as compared to H1 2017. In the first half of FY2018, the average realized price increased by 18% to $51/boe. The Production costs of the company increased predominantly in H1 2018 due to the commencement of Wheatstone LNG Train 1 production in the second half of 2017.

In the last six months, the share price of WPL decreased by 7.59 percent as on 14 December 2018. WPL’s shares traded at $31.140 with a market capitalization of circa $27.17 billion as on 17 September 2018 (AEST 4:00 PM).


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