The development of the resources discovered offshore Senegal by Cairn Energy, Woodside Petroleum, and FAR Ltd. could be hitting a bump in the road because of a conflict between two of the partners. According to a statement released by Woodside, FAR does not support the arrangements made for Woodside to undertake development works as Development Lead of the SNE oil field, at this time.
Development Lead is an important step in the transition to Woodside assuming operatorship as development works are essential to meet schedules.
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 maintains that FAR’s claims have no merit. Woodside maintains that it has an interest in the PSA, has complied with the terms of the PSA and Senegalese law, and has at all times honored its JV obligations.
Woodside CEO Peter Coleman said the SNE development offers significant value to both the people of Senegal and the shareholders of the joint venture participants.
“These actions by FAR put at risk the timely development of the SNE oil field in a prospective emerging basin,” he said.
At the Investor Briefing Day in May, Woodside stated 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.
Woodside says that FAR’s actions have the potential to negatively impact the development schedule and the anticipated timeframe for first oil, though the extent of the impact is uncertain at this time.
In response to the statement released by Woodside, FAR issued its own statement saying that it continues to support the approved JV work program, budget and development schedule as presented by Cairn, the operator. It went on to say that Woodside’s statement that it puts the timely development of the SNE at risk as incorrect.
FAR’s beef with Woodside revolves around the company’s acquisition of ConocoPhillips’ stake in the blocks, which it says it was not offered pre-emptive rights to. FAR’s position in relation to its “valuable pre-emptive rights” over the sale of ConocoPhillips’ interest in the JV is well documented and remains unresolved.
FAR went on to say in the statement: “Woodside has stated that it is transitioning to the role of operator of the JV. However, there is no JV agreement for this to occur. The JV has not received any notification that the government has approved the transfer of interest to Woodside.”
The company said it is open to finding an amicable solution with ConocoPhillips and continues to reserve its rights in relation to the dispute, including resolution through international arbitration as provided for in the JOA. If it does move on to international arbitration, the development of Senegal’s resources will indeed be delayed.
Source: Petroleum Africa