FAR First Australian Resources Limited

   By Robb M. Stewart 
 

MELBOURNE, Australia--Woodside Petroleum (WPL.AU) warned development of a promising oil find off the coast of Senegal could be delayed by a dispute with fellow Australian energy firm FAR Ltd. (FAR.AU), which won't back the larger company becoming operator of their joint venture.

FAR rejected it was putting the timing of the project at risk but said its claim to a stake in the African project that Woodside acquired remained unresolved.

Statements issued by the companies Thursday threaten to drag out the dispute, which began when Woodside in July said it had struck a deal to buy ConocoPhillips's (COP) interests off Senegal, which cover the SNE and FAN deepwater oil finds.

Woodside at the time said the US$350 million deal included the right to take over as project operator for the development and production phases. FAR has said it should have pre-emptive rights over ConocoPhillips 35% stake in the venture.

On Wednesday, Woodside said FAR won't support the arrangements for it to begin work as lead developer of the SNE field, an important step in taking over as operator and essential to keeping the project on schedule. Last month, it said it was targeting first oil as early as 2021.

In response, FAR said the joint venture had not yet been notified Senegal's government had yet approved the transfer of ConocoPhillips's interest to Woodside. It added it continued to support the venture's work program, budget and development schedule as presented by the current operator, Cairn Energy PLC (CNE.LN).

FAR said it remained open to finding an amicable solution with ConocoPhillips to the dispute and continued to reserve its rights.

A delay in the schedule is the main risk to the project as the spat between FAR and Woodside continues, although there remains time for it to be resolved before early engineering and design work is due next year and the final investment decision expected in 2019, RBC Capital Markets said in a research report.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

June 07, 2017 23:58 ET (03:58 GMT)

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