Woodside passes hat to feds to help fund $2.8b African oil project

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Woodside passes hat to feds to help fund $2.8b African oil project


LNG-giant Woodside has defended efforts to get funding from an Australian government agency for a $2.8 billion oil project, despite it being off the coast of Senegal in Africa.

The company has applied for an undisclosed loan, which could be tens of millions of dollars, from the Commonwealth Export Finance and Insurance Corporation (Efic) to help start phase one of its joint venture SNE development in West African seas. Efic's purpose is to help Australian exporters build their presence overseas.


Woodside is seeking funding from Commonwealth credit agency Efic.CREDIT:NINE

Woodside is a 35 per cent owner of the Senegal joint venture and will operate the project, which is targeting first production by 2022 at a rate of 100,000 barrels of oil a day.

Its funding application is open for public comment until April 14. Environmental think tank The Australia Institute will submit their criticisms of the project to Efic, questioning why a government agency should fund a huge oil project half a world away in the midst of the climate change debate.


“It raises a number of questions, Efic is all about providing support to projects that benefit Australia, you question why oil and gas exploration in Senegal is relevant to Australia and why Woodside wouldn’t be able to generate the finance itself,” the institute's climate and energy program director Richie Merzian said.

“A lot of this work will take place overseas and most of the products will be sold overseas, so you do question the value to Australian taxpayers with Efic lending support.”

When asked why the company thought an Australian agency should fund an African project a Woodside spokeswoman said Efic was one of many lenders approached.

“As part of the project financing process, the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture is engaging with a range of possible lenders, including commercial banks and export credit agencies, one of which is Efic,” she said.

“ECAs are public agencies and entities that provide government-backed loans, guarantees and insurance to corporations seeking to do business overseas, including in developing countries and emerging markets.


“ECAs provide open and transparent information about loan applicants and their respective social and environmental plans and procedures.

“Each ECA and commercial bank will assess the RSSD joint venture’s application on its merits and according to its own corporate values and lending criteria.”

Neither Woodside or Efic would reveal how much project finance the company had applied for.

The Woodside spokeswoman said a final investment decision on the SNE field development was expected by mid-2019.

“At which time details of the expected cost of the development will be made public,” she said.

Woodside’s application is considered a category A application by the Efic because of its size and cost.

The last successful category A application was in 2018 and saw Peruvian mining company Marcobre S.A.C. loaned $69 million to build a copper mine in Peru.

Efic’s commercial account is self-funded and the organisation operates on a commercial basis but the federal government can direct the agency to use its national account to fund nationally significant export projects such as defence projects.

It is understood any loan to Woodside would come from the commercial account.

Efic has previously come under fire for considering loans to Adani suppliers for its mega-coal mine in Queensland.