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Russiian Lukoil agrees to take 40% stake in RSSD project offshore Senegal

August 05/2020

MOSCOW (MRC) -- Russia's Lukoil said July 27 that it has reached an agreement with Cairn Energy to take a 40% stake in the Rufisque, Sangomar and Sangomar Deep (RSSD) project offshore Senegal for USD300 million, reported S&P Global.

Lukoil is expanding its presence in Africa at a time when the Russian government has identified the continent as a priority for expanding overseas energy cooperation. Lukoil is playing a key role in this strategy. Late last year it won a license for a gas-rich exploration block off Equatorial Guinea that contains the stalled Fortuna LNG project. It also has stakes in projects in Egypt, Ghana, Nigeria and Cameroon.

The RSSD project includes blocks covering an area of 2,212 square kilometers, located 80 kilometers offshore, at a sea depth of 800-2,175 meters. It includes two discovered fields Sangomar and FAN.

A final investment decision on the Sangomar field was taken in early 2020 and field development has begun. Recoverable hydrocarbon reserves at the field are estimated at 500 million barrels of oil equivalent. Launch of production is scheduled for 2023, with a designed production volume of 5 million mt of crude oil per year. This is equivalent to around 100,410 b/d.

Development of the RSSD project is being carried out under a production sharing agreement, with Woodside holding a 35% stake and acting as project operator. Other participants are FAR with a 15% stake, and state-owned Petrosen with a 10% stake.

"Entering a project with already explored reserves at an early stage of development is fully in line with our strategy and allows us to reinforce our presence in West Africa. Joining the project with qualified international partners will allow us to gain additional experience in development of offshore fields in the region," Lukoil CEO Vagit Alekperov said in a statement.

The deal is subject to approval by the Senegalese government. It also provides for a potential bonus payment to Cairn Energy of up to USD100 million when production begins.

As MRC wrote before, the European refineries of Russias No.2 oil producer Lukoil were only processing Russian oil in H2 April-early May, 2020.

We remind that Stavrolen (part of Lukoil), Russia's major polyolefins producer, resumed its polypropylene (PP) production in Budennovsk after a long scheduled turnaround. The plant's customers said Stavrolen had fully resumed its PP production after the long scheduled maintenance by 15 October 2019. The outage began on 6 September. The start-up of the plant"s high density polyethylene (HDPE) production took place with a week delay.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Lukoil  is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. Lukoil's structure includes one of the largest Russian petrochemical plant - Stavrolen.
Author:Margaret Volkova
Tags:Africa, Europe, PP, PE, crude and gaz condensate, homopolymer PP, HDPE, petrochemistry, Lukoyl, Stavrolen, Russia.
Category:General News
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