Russia’s Lukoil will sell its entire 40% interest in the Rufisque, Sangomar, and Sangomar Deep (RSSD) contract area to Edinburgh oil and gas producer Cairn Energy for up to $400 million. Lukoil intends to return at least $250 million to shareholders as a special dividend after the sale.
The blocks of the project covering 2212 km2 are located on the deepwater shelf of the Republic of Senegal 80 km from the shore with the sea depth of 800–2175 m. The blocks include two discovered fields, Sangomar and FAN.
The cash consideration payable on completion is $300 million, and up to $100 million depending on the timing of first oil and the average Brent oil price in the first 6 months of production.
The transaction is subject to customary conditions, including the approval by the government of the Republic of Senegal.
The Final Investment Decision on the Sangomar field was taken in the beginning of 2020 and field development has begun.
Lukoil estimates the recoverable hydrocarbon reserves of the Sangomar field at 500 million BOE. The field is expected to launch in 2023 with a designed production level of 5 million tons of crude oil per year.
The RSSD project is being implemented under a production-sharing agreement. Woodside is the project’s operator with 35% stake. Other participants are FAR (15%) and state-owned Petrosen (10%).
