Malcy on FAR

Malcy on FAR...

Cairn/FAR
I’m not sure why I have put Cairn in the title, a nod to the fact that this is their operatorship but the other partners are where the current arguments lie. Back in early June we saw a skirmish as WPL appeared to want to kick on with becoming the operator as per an alleged JV agreement that had been made with COP although that seems to have little credibility. As FAR has filed for arbitration, as I understand it to protect their own ability to have taken part in COP’s disposal, at the moment this is the first time since COP sold their stake without referral to the JV agreement, which is why FAR are now having to use arbitration. Another point is that whilst going through arbitration is  a slow process that may take between 9-12 months, operationally nothing should change, drilling continues and the size of the prize continues to rise.

To be honest the argument about operatorship strike me as being a bit of a side-issue, unless there has been a legally agreed pre-empt it is neither here nor there. This is the nitty gritty, WPL say that they have ‘Government support’ for their entry but it is not for the Govt to handle, quite rightly they have said that it should be sorted at JV level and FAR do not recognise WPL as a legit JV partner to do business with. Finally on this issue it seems that at the original time of the ‘deal’ between COP and WPL, FAR may have been considered the poor relation, that is sublimely no longer the case, raising A$600m +/- with their recently announced backers will be less of a problem. I think that FAR has called Woodside’s bluff here and for modest legal fees may force WPL and COP to undo the deal and re-offer a correctly legal pre-empt, either that or settle out of court….

- See more at: http://www.malcysblog.com/2017/06/o...dcasts-finally/#sthash.BwUQ19Lz.wFVBmw2c.dpuf