Australian firm Woodside Petroleum has pre-empted the sale of Cairn Energy’s 40% stake in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture (JV) contract area offshore Senegal to Russian oil and gas firm Lukoil.

The acquisition will see Woodside increase its interest in the RSSD JV to 68%, making it the largest shareholder.

Upon completion of the acquisition, Woodside will remain as operator of the project.

The company said that it will make a $300m upfront payment, along with contingent payments of $100m. It also noted that it will fund the acquisition from its current cash reserve.

Woodside’s offer is, however, subject to approval from the Senegalese Government, Cairn Energy shareholders and other customary conditions.

Woodside CEO Peter Coleman said: “Progressing the Sangomar Field Development and delivering targeted first oil in 2023 is an important part of Woodside’s growth strategy. Increasing our interest maintains the early momentum achieved since achieving final investment decision with our joint venture partners earlier this year and will simplify the equity structure for the RSSD joint venture.

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“The strength of our balance sheet and our liquidity position have enabled us to take advantage of this opportunity. We will continue to apply our prudent approach to capital and balance sheet management, including consideration over the next 12 months of value accretive reduction in our equity interest in Sangomar.”

Lukoil declined to comment on Woodside’s move, Reuters reported.

Last month, Lukoil signed an agreement with Cairn Energy to buy a 40% stake in the RSSD contract area offshore Senegal for $300m in cash.