Woodside Petroleum may increase stake in Sangomar venture
Woodside Petroleum will consider snapping up a further stake in the $US4.2bn ($5.7bn) Sangomar venture it controls in Senegal.
Woodside Petroleum will consider snapping up a further stake in the $US4.2bn ($5.7bn) Sangomar venture it controls in Senegal after Australian-listed producer FAR sold its share in a distressed sale to India’s ONGC Videsh.
The West Australian producer has 30 days to pre-empt the sale to ONGC, as it did in August after paying $US400m to thwart Russian oil giant Lukoil buying a 40 per cent stake in the development.
FAR was forced to sell its 13.7 per cent stake to ONGC for just $US45m at completion and $66m for costs incurred since the start of the year after it ran into financial strife. “Clearly in our view this is a distressed sale.
“So the price that is being received doesn’t really reflect the underlying value of the asset,” Woodside chief executive Peter Coleman said in reference to the FAR deal.
“ONGC has been opportunistic but we have 30 days and we’ll look at it and decide what’s best for Woodside. It would take Woodside up in its equity stake, which is not where we want to be, but also it’s a value-accretive opportunity. So we need our teams to have a good look at it.”
Woodside currently owns a 68 per cent stake in Sangomar but plans to trim that share to 40-50 per cent in 2021. Cutting its stake to 40 per cent would reduce its capital spending on Sangomar by $US1.2bn, Woodside said at its annual investor day on Wednesday.
The Lukoil move was in part about “protecting shareholder interests”.
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