Cairn Energy and partners sign final investment decision on Sangomar

The FTSE 250 company said the decision on the first phase of Sangomar, offshore Senegal, followed the receipt of the 25-year exploitation authorisation from the government last week.

It said the development phase would target estimated 2P recoverable oil reserves of 231 million barrels gross.

Over the life of the field, total recoverable oil resources were estimated to be about 500 million barrels, with the development also planning gas export to shore.

Woodside, as operator of the joint venture, had completed the purchase contract for the floating production storage and offloading (FPSO) facility, and also issued full notices to proceed for the drilling and subsea construction and installation contracts.

The key contractors for the development included MODEC, for the purchase of an FPSO with an oil processing capacity of approximately 100,000 barrels per day.

They also included the Subsea Integration Alliance - a non-incorporated alliance between Subsea 7 and OneSubsea - for the construction and installation of the integrated subsea production systems and subsea umbilicals, risers and flowlines; and Diamond Offshore, for two well-based contracts for the drill rigs Ocean BlackRhino and Ocean BlackHawk.

“Cairn's discoveries offshore Senegal from the country's first deep water wells opened up a new basin on the Atlantic Margin,” said chief executive officer Simon Thomson.

“Cairn has operated three drilling programmes and successfully laid the foundation for Senegal's first multiphase oil and gas development.

“Senegal is now an attractive oil and gas province, drawing the attention of the global industry.”

At 0800 GMT, shares in Cairn Energy were up 0.82% at 197p.