FAR Limited (ASX:FAR) has approved the request for a transfer of interest of a 55.55% participating interest in the highly prospective Sinapa and Esperanca petroleum licences offshore Guinea-Bissau from Svenska Petroleum Exploration GB to CNOOC Limited subsidiary CNOOC West African Petroleum E&P SA.
FAR will retain its 21.42% participating interest in each of the licences.
FAR managing director Cath Norman welcomed CNOOC to the joint venture and said the company looked forward to progressing its Guinea-Bissau acreage now that CNOOC had farmed into the project.
She said: “Attracting a national oil company such as CNOOC shows the confidence that another major company has in FAR’s Guinea-Bissau Acreage.
“CNOOC bring a wealth of technical and operational expertise and experience and we look forward to finalising the details of the future drilling plans that are expected to begin early 2020.
CNOOC, the largest producer of offshore crude oil and natural gas in China, will be obligated to fund 55.55% of all expenditures under their agreement for joint venture participation and joint operating agreements.
The Chinese company’s interest will convert to a 50% participating interest in each of the licences in the event of a commercial discovery.
Svenska will retain a reduced 23.03% participating interest and will continue to act as operator.
Once the upcoming offshore drilling campaign is complete, CNOOC may elect to assume operatorship.
Completion of the farm-out agreement is subject to approval from the Guinea-Bissau Government and customary joint venture consents which under the AJVP is not subject to pre-emption rights.
Svenska will continue operating the exploration licences as the JV prepares to drill the first deepwater exploration well offshore Guinea-Bissau in the first quarter 2020.
Past offshore exploration in Guinea-Bissau had initially concentrated in shallow water less than 200 metres deep, targeting a variety of salt diapiric-related features.
Drilling to date has encountered excellent quality reservoir sands across multiple intervals exhibiting abundant oil and gas shows.
Light oil was recovered to surface from two separate locations of which the larger is estimated to hold contingent unrisked 2C resources of about 13.4 million barrels of recoverable light oil.
Drilling of the Greater Atum prospect is being prepared for next year, making it the first offshore exploration well drilled since 2007 and the first ever deepwater exploration well offshore Guinea-Bissau.
Greater Atum is a recognised shelf-edge play analogue of the giant SNE oil field offshore Senegal and has a best estimate prospective resource of about 471 million barrels of oil.