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Woodside taps into big oil find off Senegal

Melbourne - Australia's Woodside Petroleum is expanding its push into West Africa, agreeing to buy ConocoPhillips' deepwater stakes off Senegal, including one of the world's most promising recent oil finds, for up to $430m.

The move brings a deepwater expert into the SNE field off Senegal and removes uncertainty over its ownership, which may help speed up development of a billion barrel resource that is expected to start producing within the next five years.

Australia's FAR owns 15% of the fields and Senegal's state-owned Petrosen holds 10%.

FAR managing director Cath Norman said earlier that the SNE field could start producing as early as 2019 if plans go ahead for a floating production operation.

FAR's shares fell as much as 20% on the Woodside announcement, then rebounded slightly to end down 10.7% and Woodside shares fell 1%.

Gas project

The acquisition includes a 35% interest in the 560 million barrel SNE deep water oil discovery and the FAN oil discovery further offshore, with Woodside gaining the option to become operator for development and production of the fields, for what one analyst said was a cheap price.

The deal, for $350m plus payments of up to $80m, is key for cashed-up Woodside, as it is short of growth prospects after scrapping multi-billion dollar plans to develop gas off Israel, postponing plans to develop the Browse gas project off Australia and being spurned in a takeover offer for Oil Search.

"We see the deal pricing as an attractive entry point for Woodside given that the 560 million barrels-plus is relatively well appraised," RBC analyst Ben Wilson said in a note.


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