Senegal has officially joined the ranks of oil-producing countries following the announcement of the first oil from the Sangomar field, the nation’s first offshore deepwater oil development.
This historic milestone, achieved by Australia’s energy giant Woodside, marks a significant moment for Senegal’s energy sector and economic future.
A historic milestone
Woodside has been working on Phase 1 of the Sangomar project since it was sanctioned in January 2020, targeting around 230 million barrels of crude oil. About five years down the line, the project has come on stream.
This achievement comes a few months after the arrival of the floating production storage and offloading (FPSO) unit, Léopold Sédar Senghor, named after Senegal’s first president. The FPSO has a nameplate capacity of 100,000 barrels per day and a storage capacity of 1.3 million barrels. It is moored approximately 100 kilometres offshore of Senegal.
“This is a historic day for Senegal and Woodside. First oil from the Sangomar field is a key milestone and reflects delivery against our strategy,” Meg O’Neill, Woodside’s CEO remarked.
“Delivering Senegal’s first offshore oil project safely, through a period of unprecedented global challenge, demonstrates Woodside’s world-class project execution capability. We are proud of the relationships we have formed with PETROSEN, the government of Senegal, and our key international and local contractors to develop this nationally significant resource.”
Economic and strategic impact
The development of the Sangomar field is expected to generate substantial shareholder value and contribute significantly to Senegal’s economy. With a high demand for crude oil in European and Asian markets, Woodside plans to export the oil rather than sell it locally.
The project, valued at up to $5.2 billion, includes 23 wells—11 production wells, 10 water injection wells, and two gas injection wells. So far, 21 of the planned wells have been drilled and completed, including nine production wells. The 24th well has been approved and will be completed during the current campaign.
Notably, Woodside holds an 82% stake in the project, while Senegal’s state-owned PETROSEN holds 18%.
Thierno Ly, General Manager of PETROSEN E&P, highlighted the project’s significance, saying, “First oil from the Sangomar field marks a new era not only for our country’s industry and economy but most importantly for our people.
We have never been so well positioned for opportunities for growth, innovation, and success in the economic and social development of our nation.”
Future prospects
The ongoing drilling campaign at Sangomar will continue through 2024, with production ramp-up planned for next year. The crude oil produced is expected to be around 31 degrees API, which is in high demand in international markets.
Woodside’s head of exploration and development, Andy Drummond, emphasized the rapid progress from final investment decision (FID) to first oil, achieved in just five years despite the coronavirus pandemic.
Drummond noted that Woodside would evaluate the results of Phase 1 before deciding on a potential second phase of development.
This milestone follows the recent election victory of anti-establishment former tax inspector Bassirou Diomaye Faye, who had promised to renegotiate oil and gas contracts, causing some investor concerns. However, no immediate actions have been taken.
Besides the Sangomar development, Senegal is also anticipating the startup of BP’s Greater Tortue Ahmeyim (GTA) LNG project, which straddles the border with Mauritania. Kosmos Energy holds a 28.6% stake in this project, which is expected to come online in Q3 or Q4 of this year, despite earlier delays. The first phase of the GTA project is projected to produce 2.3 million metric tons of LNG per year.
The successful launch of the Sangomar project positions Senegal as an important new player in the global oil market, promising economic growth and enhanced global standing for the West African nation.
