Gambia oil drill forces FAR to sell Senegal stake in $4. 6bn project

Jul 9, 2021, 12:39 PM | Article By: Sanna Camara

Now it is official: Australia oil giant, FAR Oil, sold its stakes in Sangomar project in Senegal in a bid to keep its license requirements for upcoming oil wells off The Gambia.

“FAR has an obligation under its licence in The Gambia to drill the well, which is targeting a potential million-barrel oil discovery, and other licence obligations to be met over the next 12 months,” Chief Executive Cath Norman said last month.

According to reports monitored by The Gambia Post, this move by the multinational company CEO is seen as a bad investment by shareholders, forcing the resignation of one of its directors, Timothy Woodall in the lead-up to the company’s AGM.

Australia’s Financial Review reported last week that Woodall’s resignation is understood to have been also driven by shareholders that had moved to vote him off the board in protest at what they see as “a misallocation of shareholder funds.”

This sale of FAR stake in Woodside’s US$4.6 billion in Sangoma Project in Senegal would enable the company to write off a debt package arranged to also support the funding of that project, which unfortunately collapsed when oil price crashed in March last year due to the impact of global Covid-19 pandemic.

FAR raised more than $150 million from investors in late 2019 and early 2020 to fund its share of Sangomar.

Simon Mawhinney, portfolio manager at Allan Gray, a 12 percent shareholder in FAR that has been calling for the deal funds to be returned to shareholders and the company wound up, said: “The blatant disregard for shareholders’ wishes is unbelievable.”

“We want our money back,” Mawhinney added.

But Chief Executive Cath Norman said Allan Gray was “only one of our shareholders” and noted that FAR had not in any case ruled out returning some of the funds, while keeping some for an upcoming well off The Gambia.

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