FAR and Woodside reach settlement in Senegal dispute
- Business & Finance
Australian FAR Limited has reached a settlement with compatriot Woodside related to Woodside’s entry into the Sangomar project, located offshore Senegal.
FAR Limited informed on Monday that, in respect of the International Chamber of Commerce (ICC) arbitration in the International Court of Arbitration between FAR and Woodside, the parties have agreed to a settlement.
Under the settlement, each party will be withdrawing its respective claims and bearing its own fees, costs and expenses in the arbitration.
On that basis, the arbitral tribunal has been invited to terminate the arbitration with immediate effect.
To remind, FAR Limited in June 2017 made a request to the International Chamber of Commerce to start arbitration proceedings to resolve the company’s dispute with Woodside regarding FAR’s right to pre-empt the sale of ConocoPhillips’ interest in the Rufisque, Sangomar, and Sangomar Deep joint venture to Woodside.
According to FAR, a valid pre-emptive rights notice had not been issued to the JV partners by ConocoPhillips and FAR invoked its right to resolve this dispute in accordance with the joint operating agreement.
In February 2020, the tribunal ruled in Woodside’s favour by determining that the Senegal RSSD Joint Operating Agreement did not grant to the JOA Parties a preemption right over a transaction involving a sale of shares in a JOA Party.
Consequently, the tribunal determined that FAR did not have preemption right over the 2016 sale of shares of RSSD 35 per cent interest holder, Woodside Energy Senegal BV (formerly known as ConocoPhillips Senegal BV), to Woodside Energy Holdings (Senegal) Limited.
The tribunal ordered the parties to provide their views on the next procedural steps arising from the decision within 45 days. FAR then started evaluating its position, which has now resulted in the termination of the arbitration.
Cost cuts ahead for Sangomar
In related news, due to the current coronavirus pandemic and the closure of Senegal’s borders as well as the sudden fall of the oil price, Woodside and its partners in the Sangomar project are working to explore and evaluate all options to preserve and enhance the value of this world-class development in the current oil price and economic environment.
The review will include how the costs can be reduced, expenditure delayed or both and any impact on the timeline to first oil.
Woodside has already made a decision to reduce its total expenditure for 2020 by 50 per cent as a response to the uncertainty in the global environment. As a result, final investment decisions for several projects will be impacted.