Oil and Natural Gas Corporation (ONGC) Videsh on Wednesday announced that it will acquire a participating interest in exploitation area and exploration area under RSSD Production sharing contract, offshore Senegal, a company statement said.

ONGC Videsh is a wholly-owned subsidiary of ONGC, and currently has participation in 37 projects in 17 countries across the globe. The statement said ONGC Videsh signed "definitive binding agreements with FAR Senegal RSSD SA (Seller), a wholly-owned subsidiary of FAR Limited (FAR) on - November 10, 2020 for acquiring 13.6667 per cent participating interest in Exploitation Area (Sangomar Field) and 15 per cent participating interest in Remaining Contract Area (Exploration Area) of Rufisque, Sangomar Offshore and Sangomar Deep Offshore (RSSD) Block, Offshore Senegal."

It also said Woodside Energy (Senegal) BV (Woodside), Capricorn Senegal Limited (Cairns) and Le Societe des Petroles du Senegal (Petrosen - the national oil company of Senegal) are other partners in the RSSD Block.

The Sangomar Field, currently under development, is located in the deep waters of Mauritania, Senegal, Gambia, Guinea-Bissau and Guinea-Conakry Basin (MSGBC Basin), Offshore Senegal, covering an area of 772 square kilometers and is planned to go on production in 2023 under Phase-1 development, as per the statement.

The acquisition will involve an "upfront consideration of USD 45 million with customary adjustments including the opening working capital as of January 1, 2020, and the cash calls paid or to be paid from January 2020 onwards until completion (excluding any default interest paid / payable by FAR for any delay in cash call payments). This shall be payable upon completion and contingent payments payable annually (capped at USD 55 million) depending upon the Brent Oil price from First Oil until the earlier of 3 years from First Oil or December 31, 2027," the statement said, adding that the total investment involved including the development cost until the first oil is expected to be around USD 600 million.

This would mark ONGC Videsh′s entry in Senegalese offshore in a significant project under development and is consistent with its strategic objective of adding high impact exploration and near-term production assets to its existing E&P portfolio.