Australian firm Woodside has moved to whisk the purchase of Cairn Energy’s 40% stake in the Sangomar project off Senegal out from under the nose of Russian firm Lukoil.
Moscow-headquartered Lukoil last month struck a deal to buy Scottish firm Cairn’s entire interest in the Rufisque, Sangomar and Sangomar Deep (RSSD) licences for $300 million up front and $100m contingent on the timing of first oil and crude prices.
But operator Woodside has now exercised its right to pre-empt the sale to Lukoil, matching the offer.
The acquisition would increase its interest in the RSSD joint venture to 68%.
The Perth-based firm said the deal remained subject to approval by the Senegalese Government and Cairn shareholders.
Woodside would fund the deal using current cash reserves.
Sangomar is on course to start production in 2023. Partners took the final investment decision (FID) on the 100,000 barrel per day field in January this year.
The field has recoverable reserves of around 500 million barrels of oil equivalent.
Woodside chief executive Peter Coleman said the acquisition was an opportunity for the firm to deepen its interest in a “well understood, world-class asset” with near-term production, while also protecting shareholder interests by removing the potential uncertainty of US sanctions applying to the development.
It’s understood the US imposed sanctions on Lukoil, including for transactions related to deepwater oil projects.