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Highlights:
- Historical Claim: FAR Limited (ASX:FAR) has been notified by Woodside Energy Group (ASX:WDS) regarding a potential $6.8 million liability for past project costs in Senegal.
- Government Scrutiny: The Senegalese government has indicated that insufficient documentation is delaying approval for cost recovery tied to exploration and development expenditures from over a decade ago.
- Ongoing Dispute: FAR Limited has acknowledged the claim but maintains that the expenditure in question occurred more than 11 years ago, raising concerns over its validity.
FAR Limited (ASX:FAR) has received notice from Woodside Energy Group (ASX:WDS) regarding a potential financial obligation related to historical project costs in Senegal. Woodside, which has been significantly invested in the West African nation’s energy sector, asserts that FAR Limited may be liable for $6.8 million in unrecovered expenditures.
The situation stems from the Senegalese government's delay in approving cost recovery for exploration and development work undertaken in the 2010s. Woodside has informed FAR Limited that ongoing discussions with the Senegalese authorities suggest unresolved financial matters, and under a contractual agreement, FAR Limited could be responsible for any unrecoverable costs.
The dispute traces back to FAR Limited’s former involvement in Senegal’s oil and gas sector, where it was a participant in exploration activities before eventually exiting the project. First oil from the venture is expected to be sold in June, but past financial obligations remain a point of contention.
FAR Limited has responded by highlighting the fact that these expenditures date back more than a decade, raising concerns over the timing and validity of the claim. The company’s communications suggest an underlying issue related to missing documentation, which the Senegalese energy ministry reportedly requires to approve cost recovery.
As the discussions unfold, Woodside continues to work with the Senegalese government to address the concerns, while FAR Limited evaluates the implications of the claim and its contractual obligations. The resolution of this issue will determine whether FAR Limited remains financially accountable for the disputed amount or if Woodside will need to seek alternative avenues for cost recovery.
