Oil and gas producer Cairn Energy on March 27 reduced investment plans by about a fifth, following the fall of oil prices to less than $30 per barrel.
Cairn and its partners, including Woodside and FAR, were assessing “substantial initiatives to reduce and re-phase” investment in the $4.2 billion Sangomar oil development project in Senegal, Cairn said in a statement.
Sangomar is expected to produce about 100,000 barrels per day with first oil scheduled for 2023.
“Based on initiatives already identified, Cairn’s expectation is that net capital expenditure on Sangomar in 2020 will be below $330 million, reduced from the original forecast of $400 million,” Cairn said.
“A broader review of capital expenditure for 2020 and future years is ongoing with the joint venture,” the company added.
FAR said in January it had signed a binding agreement with Glencore to market the Australian company’s share of crude oil from Sangomar.
For its producing fields in the British North Sea, Cairn expects capex to fall to $45 million this year from a previous forecast of $65 million.
Cairn kept its production forecast from Britain at between 19,000 and 23,000 barrels per day, just over a third of which it hedged at $62 per barrel and with production costs at below $20 per barrel.
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