Perth companies Woodside Petroleum Ltd. and FAR Ltd. are still at loggerheads over Woodside’s entry into three exploration blocks offshore Senegal, including the SNE oil field that is being readied for development.
Woodside released a statement on June 8 saying that FAR will not support arrangements for Woodside to undertake development works as the lead development company in the field. Woodside added that the development lead is an important step in the transition to the company assuming operatorship and that the development works are essential to meet the development schedule.
FAR countered this statement by pointing out that the Senegalese government has not approved the transfer of 40% interest in the three blocks—Rufisque, Sangomar, and Sangomar Deep—from ConocoPhillips to Woodside and that FAR was not provided with proper preemption rights on the deal.
FAR said it had been working in Senegal for more than a decade and that it had initiated the drilling of the SNE-1 and FAN-1 wildcats. The company added that it continued to support the approved JV work program, budget, and development schedule as presented by the operator. But, it said, Cairn Energy Ltd. is the operator of the joint venture and it is responsible for delivering the JV work program and budget, including the project development schedule.
FAR went on to take issue with Woodside’s statement that Woodside was transitioning to the role of operator of the combine. FAR countered with claims that there is no agreement for this to occur.
“The joint venture has not received any notification that the government of Senegal has approved the transfer of interest (in the three blocks) to Woodside,” the company said. “FAR’s position in relation to its valuable preemptive rights over the sale of ConocoPhillip’s interest in the joint venture is well documented and remains unresolved.”
Woodside does not believe, however, that FAR’s claims have any merit. The company maintains that it has an interest in the production-sharing agreement, that it has complied with the terms of the PSA and Senegalese law, and that it has at all times honoured its joint venture obligations.
Woodside’s statement charged FAR with putting at risk the timely development of SNE field and that its actions have the potential to negatively impact the development schedule and the anticipated timeframe for the start of oil production, which is targeting as early as 2021.
FAR had the last word in this most recent exchange by saying it continues to be open to finding an amicable solution with ConocoPhillips, but the company continues to reserve its rights in relation to the dispute, including resolution through international arbitration as provided for in the joint-operating agreement.
FAR has 15% interest in SNE field while Cairn (operator) has 40%, ConocoPhillips (or Woodside) 40%, and the Senegalese state entity Petrosen 10%.
