FAR Ltd., Melbourne, has lost its arbitration against Woodside Petroleum Ltd., Perth, over the dispute arising from Woodside’s acquisition of ConocoPhillips’s stake in the joint venture covering three blocks, including the Sangomar oil discovery, offshore Senegal.
The arbitration, initiated by FAR in June 2017 against Woodside subsidiary Woodside Energy (Senegal) BV in the International Court of Arbitration of the International Chamber of Commerce in Paris, was heard in July 2019 and the decision handed down in mid-February (OGJ Online, Aug. 1, 2019).
The tribunal found in favor of Woodside and declared that FAR did not have a pre-emption right over Woodside’s 2016 transaction to enter the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture.
Woodside acquired a 35% share in the joint venture from ConocoPhillips for $350 million, but FAR maintained that a valid pre-emptive rights notice had not been issued to the JV partners by ConocoPhillips.
ConocoPhillips rejected this at the time, saying it had complied with all applicable laws and the venture’s Joint Operating Agreement.
As part of the deal to buy into the region, Woodside also made plans to become operator of the SNE development, taking over from Cairn Energy. This too was challenged by FAR.
The tribunal has ordered the parties to provide their views on the next procedural steps arising from its decision within 45 days.
In response to the Tribunal decision, FAR said it is analysing the lengthy document and evaluating its position.
Woodside said it is committed to working with the RSSD joint venture to progress the $4.2 billion Sangomar field development which achieved a final investment decision in January 2020.
With the arbitration decision handed down, the shareholding in the RSSD joint venture remains at status quo: Edinburgh-headquartered Cairn Energy PLC with 40%, Woodside 35% and operatorship of the Sangomar development phase, FAR 15% and Senegal national oil company Petrosen 10%. Petrosen also has the right to increase its equity to 18% on development.
