LUKOIL buys Cairn's stake in Senegal's Sangomar for up to US$400 million

LUKOIL is acquiring Cairn Energy's 40% equity in the deepwater Sangomar oil project offshore Senegal for US$300 million, cash. Up to a further US$100 million will be payable, contingent on the timing of first oil and the average oil price in the first six months of production. Under our base case scenario, no contingent payments are triggered. The entry into Senegal aligns with LUKOIL's strategy and previous entry into Marine XII, offshore Congo. It compliments LUKOIL's existing positions in Nigerian, Ghana and Cameroon. LUKOIL's strong balance sheet should allay some of the funding concerns faced by the project.