Woodside Petroleum is accusing Far Ltd. of not supporting its arrangement to undertake development work at the SNE oil field offshore Senegal, however Far has responded fairly quickly, disputing Woodside’s claim.
Map of SNE, from Far.
Earlier today (8 June), Woodside said in a statement that the company had been advised by Far that it will not support arrangements for Woodside to undertake development works as development lead of the SNE oil field at this time, which would transition Woodside as operator of the project.
“Far is claiming that the Senegalese government has not approved the transfer of interest in the Rufisque, Sangomar and Sangomar Deep offshore blocks from ConocoPhillips to Woodside and that Far was not provided with proper pre-emption rights,” Woodside said in a statement. “Woodside does not believe that Far’s claims have any merit. Woodside maintains that it has an interest in the production sharing agreement (PSA), has complied with the terms of the PSA and Senegalese law, and has at all times honored its joint venture obligations.”
“These actions by Far put at risk the timely development of the SNE oil field in a prospective emerging basin,” Woodside CEO Peter Coleman said.
Woodside said in May that its transition to development lead and subsequent operatorship was underway and that the Phase 1 FPSO development is targeting first oil as early as 2021.
“Far’s actions have the potential to negatively impact the development schedule and the anticipated timeframe for first oil,” Woodside said. “The extent of the impact is uncertain at this time.”
Far sent out its own statement, disputing Woodside, and claiming that no joint venture agreement has occurred for Woodside to take operatorship over SNE.
“Woodside’s statement that Far is putting at risk the timely development of the project is incorrect,” the company said.
The company noted that it has been operating in Senegal for over 10 years and is a leading supporter of the Senegalese oil industry having initiated the drilling of the FAN-1 and SNE-1 discovery wells.
“Far continues to support the approved joint venture work program and budget and development schedule as presented by the operator. In fact, Far has promoted an accelerated development schedule to the joint venture,” the company said.
“Cairn is the operator of the joint venture and is responsible for delivering the joint venture work program and budget, including the project development schedule,” Far jabbed. “Woodside has stated that it is transitioning to the role of operator of the joint venture. However, there is no joint venture agreement for this to occur. The joint venture has not received any notification that the government of Senegal has approved the transfer of interest to Woodside. Far’s position in relation to its valuable pre-emptive rights over the sale of ConocoPhillips’ interest in the joint venture is well documented and remains unresolved. Far continues to be open to finding an amicable solution with ConocoPhillips. Far continues to reserve its rights in relation to the dispute, including resolution through international arbitration as provided for in the joint operating agreement.”
In July 2016, Woodside agreed to acquire all of ConocoPhillips’ assets off Senegal in a US$430 million deal. However, months later in October, Far disputed announcements by both Woodside and ConocoPhillips that a deal between the two firms over assets in Senegal were completed.
The SNE oil field is estimated to hold 560 MMbbl, according to Far.