Australian oil company FAR Ltd. has signed a memorandum of understanding with Glencore Energy (UK) Ltd. for Glencore to obtain FAR’s full allocation of Sangomar crude when production commences in Senegal.
FAR noted that it will benefit from Glencore’s global network and expertise to maximize the value of the new field’s oil. The oil company recently secured a $300 million reserve-based loan for its share of the Sangomar development. Glencore, together with Macquarie and BNP Paribas, is also party to a $300 million reserve-based loan package recently announced by FAR. The three lenders will each contribute $100 million to the facility.
“FAR will benefit from Glencore’s global network and multi-decades expertise in the oil and gas landscape, including access to Glencore’s unprecedented track record in successfully creating markets for new qualities of crudes, thereby maximizing the intrinsic value of the Sangomar barrels,” FAR said in a statement.
The deal comes after Woodside Energy was authorized to develop its first offshore oil project, Sangomar reportedly worth $6 billion. FAR is part of joint venture between Woodside Energy, Cairn Energy PLC and Senegal state-owned Petrosen. Drilling at the field is scheduled to begin at the end of the first quarter of 2021.
Owning 15% of the Sangomar field, FAR said it has raised more than $400 million in new capital to fund its share of expenditure for the first phase of Sangomar development.