Australian energy company Woodside has entered into a binding sale and purchase agreement to acquire Cairn’s entire participating interest in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture.

Woodside said
on Friday that the completion of the acquisition was subject to Government of
Senegal approval, Cairn Energy shareholder approval, and other customary
conditions precedent.

According to
the company, completion of the buy is targeted for the fourth quarter of 2020.

Following
completion, Woodside’s equity interest will increase to approximately 68.33 per
cent in the Sangomar exploitation area and 75 per cent for the remaining RSSD
evaluation area. Woodside will remain the operator.

To remind, the binding sale and purchase agreement follow Woodside exercising its rights to block the sale of Cairn’s stake in RSSD to Russia’s Lukoil on 17 August 2020.

As a result, per the RSSD joint operating agreement, the terms of Woodside’s acquisition of Cairn’s entire participating interest reflect those of the Cairn – Lukoil transaction.

Woodside
will pay $300 million upfront plus working capital adjustments, including
reimbursement of Cairn’s development capital expenditure incurred since 1
January 2020.

The
Australian company would also pay contingent payments of up to $100 million
linked to commodity price and the timing of first oil.

To remind, oil
and gas company FAR was also offered a pre-emptive right over the sale of Cairn’s
interest to Lukoil. FAR advised Cairn that FAR does not intend to pre-empt the
transaction or object to the proposed transfer of Cairn’s working interest in
the RSSD Contract Area to Lukoil.

It is worth noting that the $4.2 billion FID on the Sangomar offshore oil field was made at the start of 2020 and the field development has started.

The project remains on track for first oil in 2023 via a Modec-supplied FPSO regardless of the coronavirus pandemic. The recoverable reserves of Sangomar field stand at around 500 million boe.

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