(Adds Woodside CEO, analyst comments)
By Sonali Paul and Sameer Manekar
MELBOURNE/BENGALURU, Aug 17 (Reuters) – Australia’s Woodside Petroleum has exercised its ideal to match a $400 million offer by Russia’s Lukoil to buy Cairn Electrical power ‘s total stake in the Sangomar oil task in Senegal, it said on Monday.
The acquisition normally takes Woodside’s interest in the Rufisque, Sangomar and Sangomar Deep offshore joint venture to about 68%, making it the major shareholder. It will keep on being as operator of the $4.2 billion task.
Woodside will make an upfront payment of $300 million, alongside with contingent payments of up to $100 million, funded from its current cash reserves, it reported in a statement.
The acquisition would get rid of “the prospective uncertainty of U.S. sanctions implementing to the Sangomar Field progress,” Woodside Main Government Peter Coleman said in a assertion.
Lukoil, which in July presented $400 million for Cairn’s stake, is on a U.S. list of sanctioned Russian companies, like for transactions related to deepwater oil tasks. declined to remark on Woodside’s go.
Woodside explained it would consider advertising down its stake in Sangomar in excess of the future 12 months.
“We look forward to finishing the transaction with Cairn and doing work with all stakeholders, which includes probable new joint venture partners, to successfully produce Senegal’s 1st oil project,” Coleman mentioned.
Woodside will now have to foot a even bigger share of the $4.2 billion advancement charge for the job.
“It could stretch the balance sheet,” analyst Saul Kavonic reported, unless of course oil price ranges recuperate to far more than $50 a barrel or Woodside revises designs for its Scarborough fuel project in Australia.
New companions could enter the project either with Woodside’s provide-down or if Significantly Ltd sells all or part of its 13.67% stake. Considerably has been in search of a purchaser as it has been not able to increase income to fund its share of the Sangomar venture.
Woodside’s offer is subject to approval from the federal government of Senegal and Cairn shareholders.
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