The offer values FAR at $170,4 million.
LUKOIL's offer is very generous - the announced price is 2 times higher than the price of FAR shares at the close of the last trading session.
The offer is worth more than Woodside Energy’s offer for FAR’s stake in the Sangomar project.
Australian oil & gas company Woodside is the operator of the offshore area in Senegal containing the Sangomar oil field development.
LUKOIL has stated that the proposal is conditional (amongst other things) on:
- The FAR shareholder meeting to consider approving the sale of the RSSD project to Woodside scheduled for Thursday 18 February 2021 being rescheduled
- Obtaining minimum acceptances of 50.1% of shares and a FAR board recommendation
FAR also decided to hire a multinational law firm Baker McKenzie to advise on the LUKOIL offer.
Woodside has repeatedly made it clear that the company does not consider LUKOILas a suitable partner in the Sangomar project because of US sanctions.
LUKOIL is on a U.S. list of sanctioned Russian firms, including for transactions related to deepwater oil projects.
To remind, LUKOIL in July 2020 signed an agreement with Cairn Energy to acquire a 40% interest in the Rufisque, Sangomar Offshore and Sangomar Deep Offshore (RSSD) project offshore Senegal for $300 million in cash.
Woodside has blocked Cairn's stake sale in the Sangomar development to Russia's LUKOIL, by exercising its pre-emption rights.
The Sangomar Development concept is a stand-alone floating production storage and offloading facility with 23 subsea wells and supporting subsea infrastructure.
The $4.2 billion Final Investment Decision was taken at the start of 2020 and the field development has kicked off.
LUKOIL has repeatedly declared its desire to invest in Russian oil and gas projects on the Arctic shelf, but the Russian authorities do not hear.