Lukoil buys stake in offshore upstream project in Senegal

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Russia’s petroleum company Lukoil is set to acquire a stake in an offshore upstream project in the Republic of Senegal for $300m in cash.

The company has signed an agreement with UK-based Cairn Energy to buy a 40% stake in Rufisque, Sangomar and Sangomar Deep (RSSD) project in Senegal.

Cairn Energy will also be paid up to $100m upon commencement of production from the project.

The transaction is subject to customary conditions, including the approval by the government of the Republic of Senegal.

LUKOIL president Vagit Alekperov said: “Entering the project with already explored reserves at early stage of their development is fully in line with our strategy and allows us reinforcing 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.”

Located on the deepwater shelf of the Republic of Senegal, the blocks of the project cover an area of 2,212km2

They are located 80km from the shore with the sea depth of 800-2,175 meters.

The blocks contain two discovered fields that include Sangomar and FAN.

Development of the Sangomar field has already started, following the Final Investment Decision (FID) in the beginning of 2020.

The field is estimated to contain a total recoverable hydrocarbon reserves of approximately 500 million boe.

It is expected to come online in 2023, with a design production level of 5 million tons of crude oil per year.

The RSSD project is being carried under a production sharing agreement, with Woodside as operator with 35% stake. Other partners of the project include FAR (15%) and state-owned company Petrosen (10%).