08/06/2017 - 11:12

Woodside fears Senegal development delay

08/06/2017 - 11:12

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Woodside Petroleum says its joint venture partner at the SNE oilfield offshore Senegal, FAR, has declined to support a transition for the energy giant to eventually take over as operator of the operation.

Woodside fears Senegal development delay
Peter Coleman says FAR's actions put the SNE oilfield development at risk. Photo: Attila Csaszar

Woodside Petroleum says its joint venture partner at the SNE oilfield offshore Senegal, FAR, has declined to support a transition for the energy giant to eventually take over as operator of the operation.

Woodside acquired ConocoPhillips' 35 per cent stake in the block last year as part of a $460 million acquisition, and shares ownership with junior Australian explorer FAR, Britain's Cairn Energy, and Senegal's state-owned Petrosen.

The Perth-based energy giant said today FAR's decision put at risk the timely development of the SNE oilfield, and could delay the timeframe for production to start by 2021.

“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.

“Woodside does not believe that FAR’s claims have any merit. Woodside maintains that it has an interest in the production sharing agreement, has complied with the terms of the PSA and Senegalese law, and has at all times honoured its joint venture obligations.”

Woodside CEO Peter Coleman said the SNE development offered 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 under way, and that the Phase 1 FPSO development was 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 rejected Woodside’s finger pointing, telling the market in a statement that the Perth company’s statement was incorrect.

“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 said.

“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 JV is well documented and remains unresolved.

“FAR continues to be open to finding an amicable solution with ConocoPhillips.”

The company said it reserved its rights in relation to the dispute.

Shares in Woodside were 2.1 per cent lower to $30.84 each at 11am.

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