ConocoPhillips completes Senegal sale

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ConocoPhillips completes Senegal sale

Joint venture partner Far Ltd disputes transaction saying it still holds pre-emptive rights
Josh Lewis
31 Oct 2016 08:52 GMT Updated 1 Nov 2016 06:20 GMT

US company ConocoPhillips says it has completed a US$440 million deal to sell its interests off Senegal to Australian giant Woodside Petroleum but joint venture partner Far Ltd is disputing the sale.

Woodside confirmed Monday the deal had been completed for a purchase price of US$350 million plus net customary adjustments of roughly US$90 million.
This followed confirmation by ConcoPhillips late on Friday it had completed the sale of its 35% working interest in the three offshore exploration blocks, which contain the SNE and FAN deep-water oil discoveries .

“We experienced a transparent and cooperative relationship with the Senegalese government and appreciated their support throughout a very successful exploration and appraisal campaign,” ConocoPhillips’ executive vice president of strategy, exploration and technology, Matt Fox said.

“By completing this sale we are progressing our broader exit from deep-water exploration, which will further increase our capital flexibility and reduce the cost of supply of our portfolio.”

While the two companies believe the sale has been completed, Australian company Far Ltd, which holds a 15% stake in SNE released a statement on Monday disputing the transaction.

Far claims ConocoPhillips did not issue the joint venture partners a valid pre-emptive rights notice and said it had invoked its right to resolve the dispute in accordance with the joint operating agreement.

It also claims, as far as it is aware, that the Senegal government has not advised ConcoPhillips of its approval for the deal.

However, a Woodside spokesperson confirmed to Upstream the deal had received no objection from the Senegal government.

“Under the terms of Senegalese law and the PSC, the government of Senegal has authority to review the technical and financial qualifications of a proposed buyer; it had 60 days from being informed of the sale to raise possible objections,” she said, adding the timeframe had passed with no objection.

In relation to Far's pre-emptive right cliames, the spokesperson confirmed that if there was a valid dispute relating to pre-emption it would be “managed in accordance with the dispute resolution process under the joint operating agreement”.

Woodside estimates the SNE discovery to hold 560 million barrels of recoverable oil, while Far released an independent assessment by Risc Operations in August placing the best estimate contingent recoverable resources at the SNE discovery at 641 million barrels of oil.

Cairn Energy operates the deep-water acreage containing the SNE discovery, holding a 40% stake, Far currently holds 15% and Petrosen holds the remaining 10% equity.