UK-based oil and gas exploration and development firm Cairn Energy has agreed to sell its 40% stake in Rufisque, Sangomar and Sangomar Deep (RSSD) project to a Russian energy company, LUKOIL.

The stake will be sold for a total cast consideration of $400m, including $100m to be paid to Cairn Energy, upon commencement of production from the project.

Subject to customary conditions, including the approval by the government of the Republic of Senegal, the transaction is expected to be concluded in the fourth quarter of the year.

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.”

Woodside is the operator of the RSSD project

Covering 2,212km2 of area, the blocks of the project are located on the deepwater shelf of the Republic of Senegal 80km from the shore.

Sangomar and FAN are the two discovered fields in the blocks. Development on the Sangomar field has already started, following a final investment decision in the beginning of 2020.

According to the Luloil’s estimates, the Sangomar field is estimated to contain recoverable hydrocarbon reserves of total approximately 500 million boe.

It is scheduled to begin production in 2023 with designed production level of 5 million tons of crude oil per year.

Woodside with 35% stake is the operator of the RSSD project, which is being implemented under a production sharing agreement.

Furthermore, FAR holds 15% stake and the state-owned company Petrosen owns 10% interest in the project.

In October last year, LUKOIL reached a concession agreement with Abu Dhabi National Oil Company (ADNOC) for a 5% stake in the Ghasha ultra-sour gas concession offshore Abu Dhabi.