India's flagship overseas firm ONGC Videsh Ltd on Wednesday announced the acquisition of Australian firm FAR Ltd's stake in the USD 4.2-billion Sangomar oil project off Senegal's shore for USD 45 million.
This is the first acquisition by OVL, the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC), in two-and-half-years.
Sangomar is a joint venture with Australia's Woodside Petroleum and Senegal's national oil company, Petrosen.
In a statement, OVL said it has signed definitive binding agreements for "acquiring 13.6667 per cent participating interest in Exploitation Area (Sangomar Field) and 15 per cent participating interest in Remaining Contract Area (Exploration Area) of Rufisque, Sangomar Offshore and Sangomar Deep Offshore (RSSD) Block, Offshore Senegal." The acquisition, it said, is subject to partners in the field waiving the pre-emption rights.
Woodside in August exercised its right to match a USD 400 million offer by Russia's Lukoil to buy Cairn Energy's stake in the RSSD project, making it the largest shareholder.
Woodside, the operator of the block, now has a 68.33 per cent stake in the Sangomar field and 75 per cent interest in Exploration Area.
Petrosen holds an 18 per cent stake interest in Sangomar field and 10 per cent in the Exploration Area of the RSSD Block.
OVL said it will make an upfront payment of USD 45 million as well as its share of the cost of developing the field.
"Total investment involved including the development cost until the first oil is expected to be around USD 600 million," the statement said.
The Sangomar field, currently under development, is located in the deep waters of Mauritania, Senegal, Gambia, Guinea-Bissau and Guinea-Conakry Basin (MSGBC Basin), Offshore Senegal, covering an area of 772 sq km and is planned to go on production in 2023 under Phase-1 development.
"The completion of the present transaction would mark OVL's entry in Senegalese offshore in a significant project under development and is consistent with its strategic objective of adding high impact exploration and near-term production assets to its existing E&P portfolio," it said.
OVL has 39 projects in 19 countries spanning from Venezuela to New Zealand. It has so far invested USD 29.28 billion in projects abroad.
Its last acquisition was a 4 per cent stake in Lower Zakum Concession in the UAE in February 2018.