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BP Seeks Stake in Cairn Energy Senegal Assets

Source: Reuters 11/20/2017, Location: Africa

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Oil exploration company Cairn Energy (CNE.L) is in talks with BP to sell a 30 percent stake in its deepwater SNE field offshore Senegal, which could be valued at around $600 million, banking sources and a Senegal oil ministry source said. “We are aware that BP wants to acquire a stake in Cairn Energy, but they are awaiting validation by the state (of Senegal),” an adviser to Senegal’s oil minister, who declined to be named.

He had no further details. However, Mamadou Faye, director of Senegal’s state oil firm Petrosen, said no formal request had yet been made by the companies.

BP (BP.L) and Cairn Energy declined to comment.

Oil majors have been increasingly homing in on the waters off Senegal, as well as neighbors Mauritania and Gambia, where they suspect hundreds of millions of barrels lie.

A deal would further boost BP’s position in Senegal following a joint venture with Kosmos Energy in December last year, which revealed a major gas discovery in May. BP also has investments in two other offshore fields there.

Senegal and Mauritania are two areas BP is targeting over the next decade and it plans to spend billions in the Tortue LNG project which is expected to produce its first gas in 2021.

The deepwater SNE project is the first oil development inthe West African nation. Cairn shares the project with Australia’s Woodside (WPL.AX) and FAR Ltd (FAR.AX). The companies expect to start producing by 2021. Woodside, Australia’s biggest independent oil and gasproducer, bought a 35 percent stake from ConocoPhillips lastyear for up to $430 million, or $2.20 a barrel based on reserves of 561 million barrels at the time, before these were upgraded to nearly 650 million barrels.

FAR Ltd has said the project could start producing before 2021, and at a higher rate than flagged before.

Oil majors including Total SA and China’s CNOOC Ltd have also been investing in the waters off this part of the West African coast.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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