Corporate spat suggests Senegal oil is the real deal

June 8 (UPI) -- While the contractual terms could be problematic, a consultant group said spats between companies working offshore Senegal could be a positive sign for oil.

Cairn Energy and two Australian energy companies, FAR Ltd. and Woodside Petroleum, are leading in the efforts to capitalize on the oil potential off the coast of Senegal and broader West African basins.

In tit-for-tat exchanges, the two Australian companies dueled over the progress at the SNE field offshore Senegal, one of the larger oil discoveries in recent years.

Woodside said it was notified by FAR Ltd there were objections to the former taking the development lead at the SNE field. Woodside said transitioning to an operator role would be essential to getting the field developed on schedule.

"These actions by FAR put at risk the timely development of the SNE oil field in a prospective emerging basin," Woodside CEO Peter Coleman said in a statement.

FAR, for its part, countered that Woodside was out of line. FAR said the government in Senegal hasn't yet signed off on some of the contractual terms to facilitate the move.

"Cairn is the operator of the joint venture and is responsible for delivering the joint venture work program and budget, including the project development schedule," the company offered in a separate statement.

Cairn had no comment on the issue. The company said last month it had enough data from the SNE field to start preparations for submitting development plans to the government next year.

Hailed as one of the largest discoveries when declared in 2014, the companies tied to Senegal say that SNE, combined with other exploration developments, indicate there may be more than 1.5 billion barrels of oil offshore.

David Thomson, the principal regional analyst for consultant group Wood Mackenzie, told UPI he can't weigh in on the contractual terms at stake, but suggested the row was indicative of Senegal's oil potential.

"What it does show is the attractiveness of Senegal and the SNE development," he said. "We have seen BP and the China National Offshore Oil Corp. enter the country in various ways over the past six months and it is an area we are very positive about."

A final investment decision for development is expected in the early 2020s.