Russian oil and gas firm Lukoil has signed an agreement with Cairn Energy to buy a 40% stake in the RSSD (Rufisque, Sangomar and Sangomar Deep) contract area offshore Senegal for $300m in cash.

Lukoil will also pay $100m in addition upon the commencement of production from the RSSD.

The blocks of the project span across an area of 2,212km². They are located on the deepwater shelf of the Republic of Senegal 80km from the shore, at water depths between 800m and 2,175m.

These blocks include two discovered fields, namely Sangomar and FAN.

The final investment decision (FID) on the Sangomar field was taken earlier this year and field development has already started.

Following the completion of the transaction, which is expected in the fourth quarter of this year, Cairn plans to return at least $250m to its shareholders.

The transaction is, however, subject to customary conditions and necessary approvals from the Government of Senegal.

PJSC Lukoil president Vagit Alekperov said: “Entering the project with already explored reserves at an 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 the development of offshore fields in the region.”

Last month, Lukoil started drilling an exploration well at the Shirotno-Rakushechnaya prospect structure near the VI Grayfer field in the northern part of the Caspian Sea.

In May, Lukoil installed a jacket for an accommodation platform in the VI Grayfer field in the Caspian Sea.

In April, the company announced the launch of the jacket for the accommodation platform as part of the field development.