Guinea-Bissau approves increasing stake of Australia’s FAR Ltd in two oil blocs
The Guinea-Bissau government has approved upping the shareholding of Australia’s FAR Limited in licences to exploit the Sinapa and Esperança oil blocs, prolonging those licences until 25 November 2020, the company reported in a statement to the market.
Per the granted authorisation, FAR Limited increases its stake from 15 percent to 21.42 percent, a change reflecting the fact that state-owned Petróleos de Guiné (Petroguin) has given up its shareholding until a discovery with commercial value occurs.
If such a discovery is made, Petroguin will assume a shareholding of 10 percent. FAR Limited and Svenska Petroleum Exploration AB, the other partner, will then have stakes of 19.28 percent and 70.71 percent respectively.
The statement released by FAR Limited explains that the partnership obtained from the government a more favourable agreement regarding the investment needed for oil prospecting in deepwater, including the reduction of royalties to be paid to the Guinea-Bissau state if production begins.
The partnership also obtained a three-year extension for those two blocs’ licences and is obliged to drill at least one prospecting well and spend a minimum of US$3 million on each licence.
The Australian company’s administration indicates in the statement that the occurrence of hydrocarbons in Guinea-Bissau’s territorial waters is highly probable, having previously anticipated the existence of 470 million barrels of oil in the Atum bloc on the country’s continental shelf.