Senegal to start exporting crude after first oil at Woodside's Sangomar

Senegal has become an oil and gas producer for the first time after Woodside Energy announced first oil at its Sangomar project off the African country on June 11.

Phase one of Sangomar, which alongside BP's massive GTA gas project could overhaul the Senegalese economy, will produce 100,000 b/d of crude, according to the Australian oil and gas company.

Oil will load from the Leopold Sedar Senghor FPSO, named after Senegal's first president and sitting some 100 km offshore Dakar, the capital. The unit has a storage capacity of 1.3 million barrels.

Woodside expects to export Sangomar's crude, rather than sell it locally. "The crude has medium sour qualities analogous to grades such as Oman and [Norway's] Johan Sverdrup," a spokesperson said.

In total, the up to $5.2 billion project will encompass 23 wells, including 11 production wells, 10 water injectors and two gas injectors in phase one, although a 12th production well will be drilled in the current campaign, Woodside said.

The company, which also has assets in Namibia and the Republic of Congo, holds an 82% stake in the project, alongside state-owned Petrosen with 18%. It pumped 513,000 boe/d across its global portfolio in 2023.

"This is an historic day for Senegal and for Woodside," said the company's CEO Meg O'Neill. "First oil from the Sangomar field is a key milestone and reflects delivery against our strategy. The Sangomar project is expected to generate shareholder value within the terms of the production sharing contract."

"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," said Petrosen boss Thierno Ly in a statement. "We have never been so well positioned for opportunities for growth, innovation, and success in the economic and social development of our nation."

Officials in the country see economic development from the country's nascent oil and gas sector as key to stopping young Senegalese making desperate journeys to reach Europe.

The Sangomar project is an example of a rapid journey from FID to first oil, Woodside's head of exploration and development Andy Drummond told S&P Global Commodity Insights in a recent interview, taking just five years in spite of the coronavirus pandemic.

Drummond added that Woodside will analyze the results of phase one before determining whether or not to launch a second phase of the development.

Tuesday's milestone follows the shock election victory of anti-establishment former tax inspector Bassirou Diomaye Faye in March, whose promises to renegotiate oil and gas contracts made investors jittery. However, no such action has yet been taken, sources said.

Senegal is also awaiting startup of BP's Greater Tortue Ahmeyim LNG project straddling its border with Mauritania border, in which Kosmos Energy also holds a 28.6% stake.

GTA could come online in Q3 or Q4 of this year, according to Kosmos, but it has also seen significant delays. In the first phase, LNG production from the GTA project is expected to reach 2.3 million mt/year.