{"id":8598,"date":"2020-07-16T10:10:33","date_gmt":"2020-07-16T10:10:33","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=8598"},"modified":"2020-07-16T10:10:33","modified_gmt":"2020-07-16T10:10:33","slug":"far-provides-update-for-senegal-gambia-guinea-bissau-and-kenya","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/far-provides-update-for-senegal-gambia-guinea-bissau-and-kenya\/","title":{"rendered":"FAR Provides Update for Senegal, Gambia, Guinea-Bissau and Kenya"},"content":{"rendered":"

Senegal<\/strong><\/p>\n

Rufisque, Sangomar and Sangomar Deep (RSSD) (FAR 15% Working Interest)<\/strong><\/p>\n

Over the past three months, the Operator has been undertaking a program to rescope, reschedule and reprice the Sangomar Field Development project in order to reduce capital expenditure to ease the pressure on financing or the development. As previously reported, FAR had been continuing to seek financing for its share of the Sangomar Field Development but concluding these arrangements has been challenged by the current slump in oil price and global pandemic. FAR also made the strategic decision to preserve the group’s cash whilst it awaits clarity on project capex amendments and is progressing efforts to sell all or part of its holding in the RSSD blocks. FAR has been notified by the operator that it is in default of its cash call obligations, and has received notices of demand from one of the Joint Venture parties to compensate it for its share of the cash call it is funding on FAR’s behalf.<\/p>\n

FAR has been notified by the operator that its Joint Venture voting and meeting rights have been suspended. Subject to this, FAR continues to work with the Operator to manage the continued impact of COVID-19 on the supply chain and project schedule for the Sangomar Field Development and other activities under the Production Sharing Agreement. The Operator is working with project contractors and the Government of the Republic of Senegal to optimise near-term spend whilst protecting the overall value of the investment and remain on schedule to deliver first oil in 2023.<\/p>\n

Detailed engineering is progressing and long lead item purchase orders are continuing to be awarded for major equipment items in preparation for commencement of drilling operations in mid 2021.<\/p>\n

Processing of the high definition seismic survey over the Sangomar field and FAN discovery has been completed and interpretation of this data has commenced. Processing of the seismic data over the exploration area to the north of the Sangomar field is ongoing.<\/p>\n

During the quarter, FAR Senegal RSSD SA (a wholly owned subsidiary of FAR limited) did not pay the June, and subsequent, cash call and accordingly has received notification from the Operator of the RSSD Joint Venture that FAR Senegal is in default. FAR has received notices of demand from one of the Joint Venture parties to compensate it for its share of the cash call it is funding on FAR’s behalf.<\/p>\n

Under the JOA default provisions, if a defaulting party has not fulfilled its financial obligations within 6 months from the date of notification of the default, it shall forfeit its participating interest without compensation. Unpaid amounts accrue interest at the LIBOR rate + 2%.<\/p>\n

Key points of the Joint Operating Agreement (JOA) default provisions are:<\/p>\n