LUKOIL enters hydrocarbon production project in Senegal for US$300mn

industrial 2316492 640Oil and gas company LUKOIL has entered into an agreement with Cairn Energy to acquire a 40 per cent interest in Senegal’s Rufisque, Sangomar and Sangomar Deep (RSSD) project for US$300mn in cash

The agreement also provides for a possible bonus payment of up to US$100mn to Cairn Energy after production commences. The transaction is subject to customary terms including approval by Senegal government.

The project blocks cover 2212 sq km are located on Senegal’s deepwater shelf 80km from the shore, with a depth of 800-2.175 m. The blocks encompass two fields discovered: Sangomar and FAN.

At the beginning of 2020, the Final Investment Decision (FID) on the Sangomar field was adopted, and field development has started. The recoverable hydrocarbon reserves of the Sangomar field total about 500mn boe according to the company’s estimates. The field is planned to be launched in 2023 with five million tons of crude oil per year designed to produce.

The RSSD project is being implemented under a production sharing agreement. Woodside is the project’s operator with 35 per cent stake. Other participants are FAR (15 per cent) and state-owned company Petrosen (10 per cent).

“Entering the project with already explored reserves at early stage of their development is fully in line with our strategy and allows us to reinforce our presence in West Africa. Joining the project with qualified international partners will allow us to gain additional experience in development of offshore fields in the region,” said Vagit Alekperov, president of PJSC LUKOIL.

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