Joint Venture Dispute: ConocoPhillips Australia Initiates Buy-Out of 3D Energi Stake

Following default notices in the VIC/P79 exploration permit, ConocoPhillips Australia initiates a buy-out of 3D Energi’s 20% interest in the offshore Otway Basin project.

By: AXL Media

Published: Mar 18, 2026, 11:27 AM EDT

Source: Reuters

Default Notices and Joint Operating Agreement Protocols

The dispute centers on 3D Energi’s 20% stake in the permit, which is operated by ConocoPhillips Australia (holding 51%) alongside partner Korea National Oil Corporation (holding 29%). Under the terms of their agreement, ConocoPhillips is seeking to acquire the interest at "fair market value." If the parties cannot reach a mutual agreement on the price, an independent expert valuation will be mandated. Once the valuation is finalized, ConocoPhillips has a 30-day window to exercise its right to purchase the stake.

Strategic Options and Potential Dilution

Should ConocoPhillips choose not to exercise the buy-out after the valuation, the JOA allows for alternative remedies. These include a potential dilution of 3D Energi’s participating interest, effectively reducing their ownership without a total exit. Currently, 3D Energi is obtaining legal and financial advice to challenge the validity of both the original default notices and the subsequent buy-out attempt. The outcome of this legal review will likely determine whether the smaller firm can remain a partner in the high-stakes Otway development.

The Otway Basin’s Role in Regional Energy Security

The Otway Basin remains a critical focal point for Australia’s domestic gas supply. As the country balances its transition to cleaner energy with the immediate demand for dispatchable power, offshore permits like VIC/P79 are vital. ConocoPhillips’ move to consolidate control suggests a desire for a more streamlined decision-making process as the Phase 1 drilling program enters more intensive stages. For major operators, having partners who can consistently fund their share of multi-million dollar drilling campaigns is essential for maintaining project timelines.