http://www.upstreamonline.com/hardcopy/1544784/senegal-sets-out-o...

http://www.upstreamonline.com/hardcopy/1544784/senegal-sets-out-on-path-towards-new-bid-round

Senegal sets out on path towards new bid round

Country prepares a foundation that could lead to licensing offer before proposed legislative reforms
Barry Morgan
Paris
2 Aug 2018 22:00

Senegal may be preparing the ground for a licensing exercise before the passage of proposed legislative reforms, despite ongoing controversy over whether commitments have been met on several licences and litigation directly affecting the flagship SNE development.

A comprehensive list of active titles to licences onshore and off Senegal, valid as of 31 December last year, has surfaced on Senegal’s Extractive Industries Transparency Initiative (EITI) website, indicating Total’s controversial acquisition of the Rufisque Deep and its reconnaissance deal for the ultra-deep.

Perhaps more importantly, the list deletes Tender Oil & Gas, owned by jailed Romanian magnate Ovidiu Tender, from title claimed for the Saloum and the Casamance onshore permits.

The publication follows hard on the heels of a map released by Senegal’s EITI that confirmed the deletion of Elenilto claims to the Casamance shallow waters, as well as onshore claims by T5 Oil & Gas and Nigeria’s A-Z Petroleum to Palaeozoic basin blocks Louga and Djourbel, respectively.

T5, which is currently seeking a dual flotation in Dublin and London, appears to still claim a 90% operating stake in the Louga basin, ratified six years ago, telling shareholders it has agreed and expects to secure a new production sharing contract on similar terms to the original.

This is despite state-owned Petrosen confirming to Upstream last week that the licence has been revoked “for failure to comply with drilling commitments”.

T5 did not respond to requests for comment. The smaller players are loath to walk away as potential farm-in partners have been lined up and the respective joint operating agreements allow for the right to negotiate.

Upstream understands from one senior executive that Elenilto has “restarted talks to allow it to resume exploration of Senegal South Shallows rather than litigate as others have done”.

The list also restores African Petroleum’s title to the Casamance Deep, suggesting a deal may be in the offing over the Oslo-listed explorer’s decision to reserve its rights over the deep-water Rufisque acreage. Both licences are currently in arbitration.

Neither is Australia’s Far Ltd backing down on its claim to rights of first refusal to the 35% equity held by ConocoPhillips in the Rufisque-Sangomar-Sangomar Deep (RSSD) block hosting the SNE field, now targeting a final investment decision in mid-2019 and first oil between 2021 and 2023, according to Far’s second-quarter results this week.

Partners until recently had predicted the final investment decision on SNE, today still operated by Cairn Energy, would be taken before the end of the year.
However, co-venturer Woodside Petroleum needs to be sure of title before its board approves a $2 billion deep-water development.

The International Chamber of Commerce arbitration initiated by Far in June last year to seek pre-emptive rights to the purported sale of equity to Woodside now requires parties to settle terms of reference and co-ordinate procedural documents.

“The procedural timetable is being finalised (and) indications are that a final hearing in the arbitration is unlikely to occur before the second half of 2019,” according to Far.

Farther north, border issues have held up the BP and Kosmos Energy-operated Greater Tortue gas development as both Senegal and Mauritania ratchet up their power play. However, BP signalled progress this week following meetings between the company and the governments of both countries.

Meanwhile, the country manager of one regionally active operator told Upstream that Shell’s decision last month to help Chariot Oil & Gas out of financially troubled waters on Mauritanian Block C19 “offers an object lesson in how a sovereign can move things along without undue upset”.

Meanwhile, international arbitration expert Betto Seraglini has been called in to support African Petroleum in Senegal, while President Macky Sall this summer hosted China’s President Xi Jinping and separately Eni chief executive Claudio Descalzi. He also visited Russian President Vladimir Putin in Moscow to discuss oil and gas development.

Sall has promised a draft petroleum code by September, around the time that TGS and GeoPartners aim to deliver interpretation of seismic shot back in March, but that leaves little time for parliamentary debate before presidential elections in February.