Following the successful start-up of the Sangomar deepwater project offshore Senegal, operator Woodside is actively considering a second development phase. This potential expansion is viewed as a highly attractive opportunity within the company's portfolio.

Phase 1 Development and Performance

The first phase of the Sangomar project commenced production in June 2024. It utilizes 23 subsea wells tied back to the Leopold Sedar Senghor floating production, storage and offloading vessel, which achieved a production rate of 100,000 barrels per day within three months. With a cost of US$5.2 billion, Phase 1 is designed to tap proven and probable reserves of 229 million barrels of oil equivalent. The initial phase targets less complex reservoir units and is also testing other reservoirs to facilitate future gas export to shore. The reservoir performance from Phase 1 has been described as "really strong," exceeding the midpoint of the performance range predicted at the time of the final investment decision in 2020. As anticipated, production began to decline in October with an increasing water cut, and the team continues to gather and analyze data to identify potential infill drilling targets.

Proposed Phase 2 Development

The second phase aims to exploit an additional resource of approximately 250 million barrels of oil. The development concept involves a larger subsea system than Phase 1, with a base-case plan for 33 subsea wells—comprising 16 producers and 17 water injectors. The estimated cost for this expansion is US$2.5 billion. However, a final investment decision is pending and is contingent upon improving confidence in the subsurface conditions, assessing reservoir performance data from Phase 1, evaluating market conditions, and determining capital allocation priorities.

Contractor and Partnership Prospects

The Subsea Integration Alliance (SIA), a partnership between Subsea7 and OneSubsea, is the frontrunner to secure the contract for Phase 2. SIA was responsible for providing all subsea equipment for Phase 1 under a construction and installation contract. Woodside's chief executive indicated that the necessary permits, design, and contractor are already in place for the potential second phase. Despite this readiness, as of September, Subsea7's presentations did not list Sangomar Phase 2 as a project for which bid documents would be issued within the following 12 months.

Strategic Considerations

Woodside's leadership has expressed a very bullish outlook on Phase 2, ranking it as the highest-ranking opportunity in their portfolio of brownfield subsea tiebacks. A key strategic element for moving forward is a "sell-down" of Woodside's substantial 82% working interest in the asset, which is considered important for the project's progression.

This material is an AI-assisted summary based on publicly available sources and may contain inaccuracies. For the original and full details, please refer to the source link. Based on materials by Iain Esau. All rights to the original text and images remain with their respective rights holders.