Junior oil explorer FAR Ltd has lost the long-running arbitration case it initiated over Woodside Petroleum's entry into an oil venture in Senegal, cementing its senior partner's position in the $US4.2 billion ($6.3 billion) project.

FAR said it was analysing the ruling from the International Court of Arbitration, received on Friday morning,  and "evaluating its position". Its shares dropped as much as 8.8 per cent in early trading to 3.1¢.