ConocoPhillips’ plans for an offshore stake sale in an oil discovery offshore Senegal may not happen according to plan after a junior partner tried to cancel the deal.
Australian explorer FAR Ltd. announced today that ConocoPhillips failed to comply with the terms of their joint agreement regarding the proposed sale and had no right to exercise pre-emption.
“FAR advises that, in its opinion, and as supported by legal advice, ConocoPhillips has failed to comply with the terms of the Joint Operating Agreement in relation to the proposed sale of its interests in the Senegal project. As a consequence, FAR believes that the pre-emption period has not yet commenced,” FAR announced in a statement.
ConocoPhillips Offshore Stake Sale Hit Hurdle
“FAR has advised ConocoPhillips of this and both parties have been urged by the Government of Senegal to reach an amicable solution on this matter,” the company added.
“FAR has also advised the Government of Senegal that it will participate in prompt efforts to reach an amicable solution to this matter,” it stated further.
SNE Field Discovery Map
ConocoPhillips had agreed in July to sell its stake in the deep water SNE field offshore Senegal to Woodside Petroleum for US$430 million (£326.59 million).
At the time, the field was estimated to hold 561 million barrels of oil, but FAR recently disclosed estimates of 641 million barrels and estimated the field covered more than 135 square miles, as initially believed.
Offshore Senegal Field Sees 14% Rise in Estimated Resources
The announcement of the rise in estimated resources was also made today.
“RISC’s new independent assessment of SNE’s 2C contingent recoverable resource of 641 million barrels represents a significant 14% increase to RISC’s previously reported estimate of 561 million barrels, and a stellar increase of 361% from the pre-drill estimated size of the field,” FAR Managing Director Cath Norman, said.
“The industry phrase ‘good fields get better’ could not be more appropriate for this world class field,” she added.
“We look forward to providing investors with a future statement on FAR’s view of the commerciality of the SNE oil field, update on our prospective resources, and the resumption of drilling offshore Senegal in 2H 2016. SNE is a world class oil field that is truly worthy of the “elephant” title”, Norman stated further.
FAR owns a 15% stake in the SNE field.