Santos is to acquire Cairn Energy’s interests in block 16 (Sangu) and block 16 (Exploration), which are located in the Bay of Bengal, offshore Bangladesh, India.

Santos already holds a 37.5% interest in the producing Sangu field, which was acquired in 2007.

The Sangu facilities have substantial spare capacity to process and deliver additional gas into the rapidly growing domestic market.

Martyn Eames, Santos vice-president Asia Pacific, said the acquisition was consistent with Santos’ Asian strategy of building material and sustainable businesses to meet its growing energy needs.

“In 2010 we acquired 3D seismic surveys in and around the Sangu field and on the Magnama exploration prospect, and have identified a number of exciting drilling opportunities that can be tied back to the existing Sangu facilities,” Eames said.

Following the completion Santos will become operator of block 16 and will hold a 75% stake in the field and Halliburton will hold the remaining 25%.

The deal is expected to close by the end of 2010.