By Ian Walker 
 

Lukoil PJSC said Monday that it is buying a 40% interest in the Rufisque, Sangomar and Sangomar Deep project in the Republic of Senegal for up to $400 million in cash from Cairn Energy PLC.

The Russian energy company said it will pay an initial sum of $300 million to Cairn with a potential bonus payment of $100 million once production starts.

The recoverable hydrocarbon reserves of the Sangomar field are estimated at 500 million barrels of oil equivalent. The field is planned to be launched in 2023, with designed production level of 5 million tons of crude oil a year, Lukoil said.

Separately, Cairn Energy said it will return $250 million of the funds from the sale to shareholders via a special dividend.

The deal is subject to the approval of the other partners in the project as well as the Government of Senegal and Cairn's shareholders. If approved, completion is expected in the fourth quarter of this year.

Woodside Petroleum is the project's operator with a 35% stake. Other participants are FAR (Senegal) with 15% and state-owned company Petrosen with 10%.

 

Write to Ian Walker at ian.walker@wsj.com

 

(END) Dow Jones Newswires

July 27, 2020 02:59 ET (06:59 GMT)

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