Woodside is advancing plans for a potential second development phase at its flagship Sangomar deepwater project offshore Senegal, which could exploit approximately 250 million barrels of oil resources. This phase is envisioned to utilize a larger subsea system, with a base-case design involving 33 subsea wells—16 producers and 17 water injectors—to target reservoirs not developed in the initial phase.

Project Context and Phase 1 Overview

The Sangomar project commenced production in June 2024 through Phase 1, which involved 23 subsea wells tied back to the Leopold Sedar Senghor floating production, storage, and offloading vessel. This phase achieved a production ramp-up to 100,000 barrels per day within three months, tapping proven and probable reserves of 229 million barrels of oil equivalent at a cost of $5.2 billion. Phase 1 focused on less complex reservoir units and included testing to support future gas export to shore.

Phase 2 Development and Investment Considerations

Phase 2 aims to exploit a similar resource volume as Phase 1 but through an expanded subsea infrastructure. However, a final investment decision is pending, as Woodside seeks to improve confidence in the subsurface reservoir performance. Key factors influencing this decision include reservoir data from Phase 1 operations, market conditions, and capital allocation priorities. The company's leadership has described Phase 2 as a highly attractive opportunity and the top-ranked project in its portfolio of brownfield subsea tiebacks, though it requires further analysis before advancing through the formal decision-making process.

Contractor Involvement and Strategic Partnerships

The Subsea Integration Alliance (SIA), comprising Subsea7 and OneSubsea (a partnership of Subsea7, SLB, and Aker Solutions), is positioned as the likely contractor for Phase 2, having supplied all subsea equipment for Phase 1 under a construction and installation contract. Woodside has indicated that the necessary permits, designs, and contractors are in place for Phase 2. Additionally, Woodside emphasized the importance of a "sell-down" of its 82% working interest in the asset to manage investment exposure.

Current Status and Future Outlook

Phase 1 reservoir performance has been reported as "really strong," exceeding mid-range predictions made at the time of the final investment decision in 2020. However, production began to decline in October 2024, with an increasing water cut, which is an expected characteristic of the field's lifecycle. Woodside continues to gather and analyze data to identify potential infill drilling targets, but more work is needed before Phase 2 can progress. Notably, as of September, Subsea7's presentations did not indicate that bid documents for Sangomar Phase 2 would be issued within the following 12 months, reflecting the cautious, data-dependent approach to further development.