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AfrOil: Lukoil rethinks Sangomar bid

Russia’s Lukoil has abandoned its attempt to join RSSD, the joint venture set up to develop the Sangomar block offshore Senegal, through acquiring Australia’s FAR Ltd. Its decision came to light last week, when FAR said in a statement that the Russian company had opted not to submit a binding takeover offer ahead of a shareholders meeting scheduled for April 15.

Lukoil, Russia’s largest privately owned oil operator, had offered earlier this year to pay AUD220mn ($168.43mn) for 100% of equity in FAR. Its bid was conditional upon the latter company’s retention of its stake in RSSD, which consists of a 13.67% interest in Sangomar Offshore and a 15% interest in the other two sections of the Sangomar block. However, the Russian company has now dropped this plan.

Its decision clears the way for Australia’s Woodside Energy, the operator of RSSD, to proceed with its acquisition of FAR’s minority stake in the consortium. FAR said in its statement that its board of directors still favoured the plan to sell this asset to Woodside on the same terms proposed last November by ONGC Videsh Vankorneft, a subsidiary of India’s ONGC Videsh Ltd (OVL).

Lukoil has tried once before to acquire a stake in the RSSD group. It arranged to buy the 40% stake held by Cairn Energy (UK), only to have Woodside pre-empt the deal in August 2020.