OIL and gas firm Bowleven, which moved its headquarters from Edinburgh to London following a boardroom coup, is facing fresh complications in its efforts to develop a find off Africa amid the war in Ukraine.
The company said yesterday that “the recent Ukrainian crisis has adversely impacted the pace of the new chapter” in the Etinde development off Cameroon.
Bowleven’s Joint Venture (JV) partners in the proposed development include the Russian firm Lukoil PJSC. Bowleven said Lukoil has been impacted by the recent imposition of Russian sanctions.
READ MORE: Shell moves to exit Russia as it deplores loss of life in Ukraine
It added: “ Notwithstanding being a private sector concern, we are as yet uncertain of how the Ukrainian conflict will impact the timeframe for obtaining final investment decision ('FID') for the project.”
Bowleven said that there remains a “considerable number of regulatory and commercial uncertainties regarding aspects of the Etinde development” together with reaching multi-stakeholder approval of the JV partners' preferred development option.
The company added: “We currently expect FID to occur in late 2022 however this will be reliant on many of the above considerations being resolved by mid-2022. Not adequately resolving these may cause FID to slip to 2023, or higher investment spending on Etinde than currently considered, which will create a high financial risk for Bowleven.”
However chief executive Eli Chahin said: “The Group made significant progress in 2021 as the Etinde JV members concluded on a realistic and economically beneficial way to progress Etinde's development.”
He said Bowleven remains optimistic that all the JV members are aligned to bring to fruition the more economic Etinde development option.
The company will get $25m from its partners if an FID is made on Etinde under a $250m deal struck by former chief executive Kevin Hart in 2014.
READ MORE: Hart hits back on leaving Bowleven
Mr Hart was voted off the board in March 2017 with four other former directors following a campaign for change led by a rebel investor.
Bowleven said it lost $1.2m (£0.9m) in the six months to December 31, against $0.9m in the same period of 2020.
The company had $2.5m cash and cash equivalents at December 31, along with $2.5m shareholdings which it said generate reasonable financial return at relatively low investment risk.
Bowleven shares closed down 0.35p at 3.25p, leaving it with a stock market capitalisation of around £11m.
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