https://www.clearygottlieb.com/news...gal-and-petrosen-in-two-major-energy-projects
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Republic of Senegal and PETROSEN in Two Major Energy Projects
January 10, 2020
Cleary Gottlieb acted as counsel to the Republic of Senegal and PETROSEN, the Senegalese national oil company, in connection with a series of agreements providing for the development of the Sangomar field offshore Senegal, and the financing of PETROSEN’s share of the development costs.
The agreements were finalized in connection with the issuance of an Exploitation Authorization by the Government of Senegal on January 8, 2020.
The Sangomar field is a major hydrocarbon reservoir located offshore Senegal in deep waters. It is to be developed under a Production Sharing Agreement between the Republic of Senegal and a consortium consisting of Woodside (the operator), Cairn, FAR, and PETROSEN. It is expected to produce up to 75,000 to 100,000 barrels per day of crude oil over a 25-year production period, as well as natural gas, in a three-phase development scheme with projected total investments of $9 billion.
The Exploitation Authorization issued on January 8, 2020 related to the first phase of the development, for which investments are projected to be approximately $4.4 billion. In connection with the issuance of the Exploitation Authorization, the Republic of Senegal and the consortium negotiated and finalized a Host Government Agreement designed to facilitate external financing and to update the Production Sharing Contract (which was originally signed in 2004).
In parallel, an agreement was finalized for the financing of PETROSEN’s share of development costs. PETROSEN has a 10% interest in the consortium, which it has the right to increase to 18% at its option, within six months of the issuance of the Exploitation Authorization. PETROSEN will enter into a secured facility agreement with Woodside, the field operator, providing up to $450 million of financing for Phase 1. Cleary represented the Republic of Senegal and PETROSEN in connection with the negotiation of the Host Government Agreement and the secured facility agreement, and also advised on other project contracts, such as agreements relating to a Floating Production, Storage and Offloading unit, and a joint marketing agreement.
Cleary is also representing the Republic of Senegal and PETROSEN in connection with the Grand Tortue Ahmeyim (GTA) project, an offshore LNG project relating to a gas field that straddles the maritime border between Senegal and Mauritania. The project is being developed by BP and Kosmos Petroleum, together with PETROSEN and SMHPM, the Mauritanian national oil company.
Cleary assisted the Republic of Senegal in connection with the negotiation of an intergovernmental agreement for the unitized development of the field, and a related tax agreement, and assisted PETROSEN in connection with the negotiation of a unit operation agreement among the consortium members. Cleary also acted as counsel to PETROSEN in connection with the negotiation of a secured carry advance agreement, executed in March 2019, through which BP and Kosmos made available up to $435 million to fund PETROSEN’s share in the costs associated with Phase 1 of the GTA project. In addition, Cleary is advising on the main project agreements, including agreements for the chartering, operation, and maintenance of a Floating LNG facility, and the LNG Sale and Purchase Agreement.
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