Woodside Petroleum has flagged a possible delay in the development of the promising SNE deepwater oilfield off Senegal's coast after joint venture partner FAR Ltd refused to support a transition for the oil and gas giant to eventually take over as operator.
The Australian energy giant said FAR's decision puts at risk the timely development of the SNE oilfield, and could delay the time frame for production to start by 2021.
Woodside acquired a 35 per cent stake in the block last year from ConocoPhillips as part of a $460 million acquisition, and shares ownership with junior Australian explorer FAR, Britain's Cairn Energy, and Senegal's state-owned Petrosen.
FAR has claimed that it was not provided with proper pre-emption rights at the time of the deal, and says the Senegalese government has not yet approved the transfer of interest from ConocoPhillips to Woodside.
"Woodside has stated that it is transitioning to the role of operator of the joint venture," the junior explorer said in a separate statement.
"However, there is no joint venture agreement for this to occur.
"FAR continues to reserve its rights in relation to the dispute, including resolution through international arbitration as provided for in the joint operating agreement," it added.
Royal Bank of Canada analyst Ben Wilson said that while there was still time to resolve the spat, FAR's unyielding stance on the issue meant it has likely found a potential funding solution should it succeed in getting pre-emptive rights.
He linked it to FAR's recently-announced partnership arrangement with Chinese energy giant CNOOC.
At 1354 AEST, Woodside shares were down 2.03 per cent at $30.88, in line with other sector stocks on the ASX, while FAR shares were unchanged at 7.6 cents each.
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