Woodside Petroleum has pre-empted the sale of Cairn Energy’s 40% share of the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture offshore Senegal to Russia’s Lukoil (OGJ Online, July 27, 2020).
Woodside will purchase Cairn’s interest in the permits, which include Sangomar oil field development, for an up-front purchase price of $300 million plus working capital adjustments. These include reimbursement of Cairn’s development capital expenditure incurred since the beginning of January.
Contingent payments of up to $100 million are linked to commodity price and timing of first oil.
The economic effective date for the purchase is Jan. 1, 2020.
Woodside said the participating interest may be reduced to the extent that JOV participant FAR Ltd. or La Societe Des Petroles Du Senegal exercise their pre-emption rights in respect of the Cairn-Lukoil transaction.
The acquisition is subject to approval by the Senegalese government, along with Cairn Energy shareholder approval and other conditions precedent.
Woodside said it will fund the acquisition from its cash reserves.
Woodside’s equity in the RSSD joint venture upon completion of the sale will increase to 68% and the company will remain as operator.
It is not known whether Woodside will sell down some of this interest, but managing director Peter Coleman said the company looks forward to completing the transaction with Cairn and working with all stakeholders, including potential new joint venture partners, to deliver Senegal’s first oil project.
First oil from Sangomar field development is targeted for 2023 following a final investment decision for the project earlier this year.
