Australian oil and gas company FAR Limited has temporarily suspended its plans to drill an exploration well offshore The Gambia as a result of the coronavirus pandemic.
FAR Limited is the operator of the A2 and A5 blocks located offshore Gambia.
In an update on Wednesday, FAR said that the Gambian government has closed its borders.
As the operator of the A2 and A5 blocks, FAR has been making preparations to drill an exploration well in the second half of this year, but these plans now need to be adjusted as a result of the COVID-19 pandemic.
To remove the risk to FAR personnel and contractors, and in recognition that the international supply of services is currently uncertain, FAR said it will be temporarily suspending the drilling plans.
The project is currently at an early stage and at a good hold-point for reactivation at some time in the future. Other work in the block will be optimized to suit the business requirements and all license obligations will continue.
This program adjustment will be done in consultation with partner Petronas and the Government of The Gambia.
FAR and its partners will continue to assess the situation on the ground with a view to reactivating the drilling project when it is safe and sensible to do so. Under the license, the well is not obliged to be drilled until 3Q 2021.
FAR Managing Director, Cath Norman , said: “ The rapid decline in oil prices has created a significant headwind for energy companies, and the board of directors feel it is prudent to adjust our spending levels in order to protect our balance sheet and ensure sustainability of our business based on our current understanding of market conditions.
“The Senegal JV is working to better understand the impact on the Sangomar development of the COVID-19 virus and we anticipate releasing an update in the near future.”
The FAR board recognized that this is an extraordinary business climate that is affecting FAR’s ability to deliver work programs in all its assets.
Where possible, the company is looking to suspend expenditure and conserve FAR’s cash until the global climate is more predictable and stable.
In order to keep people safe at this time, FAR has adopted a work from home practice for its staff and contractors and this has been in place for the past week.
FAR’s Australian citizens who were traveling on business have returned and are completing the last few days of their mandatory isolation periods.
It is also worth mentioning that FAR and other partners in the Sangomar project offshore Senegal, operated by Woodside, are exploring how the costs for the project can be reduced and expenditure delayed due to the current coronavirus pandemic and the sudden fall of the oil price.