Operator Cairn Energy previously assessed the minimum economic field size for the SNE project offshore Senegal to be around 200 MMbbl.
The project is at pre-front-end engineering and design, and development planning is under way. FAR has completed pre-engineering studies with consultancy AMOG and has prepared an SNE field concept development plan based on its upgraded P50 (2C) contingent resource estimate of 641 MMbbls.
A standalone FPSO development is under consideration, with topsides expansion capability for later SNE field development phases and satellite tiebacks.
FAR’s development concept represents a phased approach with a plateau production rate of 140,000 b/d and first oil in 2022. FAR placed development expenditure at $13-15/bbl and opex, including FPSO lease costs, at $12-14/bbl.
In August, the company announced an independently verified third material increase in SNE’s contingent resources estimates. Contingent 2C (P50) reserves are now placed at 2C 641 MMbbl; 1C (P90) at 348 MMbbl; and 3C (P10) at 1,128 MMbbl. These upgraded numbers represent a 14% and 26% increase in 2C and 1C contingent resources, respectively. At that time, FAR said: “As more data has become available, the field size has increased by 316% at the 2C level from the pre-drill best estimate of 154 MMbbl.”
Cairn said in its August half-yearly report that the independently verified current best estimates for gross 2C oil in place is more than 2.7 Bbbl.
In its recent half-year results announcement, Cairn Energy reported economic scenarios for a standalone SNE development project. Breakeven oil price was estimated at $35/bbl and based on a $70/bbl oil price; net present value at final investment decision was $12.5/bbl and internal rate of return at FID of 38%. FAR said that Cairn’s valuations are consistent with its estimates.
The development concept is based on 70-80 development wells through field life (50% producers, 50% injectors) with an average estimated ultimate recovery per well of more than 8 MMbbl of oil based on total wells. FAR’s first phase development requires 20-25 wells.
Further appraisal drilling on the SNE oil field will evaluate the connectivity of the upper reservoirs and to improve definition and scale of the first phase development project. FAR expects further appraisal drilling to start in late 2016.
FAR Managing Director Cath Norman said: “FAR’s recently released third upgrade to the SNE oil field contingent resources and preparation of a detailed concept development plan supports FAR’s view that SNE is a world-class oil field that can support a commercial development. FAR has assessed that the SNE field has surpassed the minimum economic field size and the project is at the pre-FEED stage with development planning under way. The focus is on optimizing and scaling a first phase development project.
“The project is well positioned to benefit from cost deflation. Development and operating costs estimates for the concept development are relatively low, making the break-even oil price very competitive in the current oil price environment at less than $40/bbl. Further appraisal drilling expected to start in late 2016 will target understanding the connectivity of the upper reservoirs and help optimize and scale the development.”