Shares of Edinburgh-based international oil and gas company Cairn Energy edged higher on Wednesday after it said it took a final investment decision (FID) on the Sangomar field development in Senegal.

Cairn described the Sangomar field as being on target to be a “project of national significance and an anchor for economic and social development” in Senegal.

“As the first oil development for the country it is anticipated it will provide a major impetus for the national economy and local population for many years,” said the Edinburgh firm.

Cairn shares edged 1% higher to around 170p to give the firm a current stock market value of around £1.1 billion.

In a stock exchange statement, Cairn said: “Cairn, along with its joint venture partners, Woodside and FAR, has signed a joint Final Investment Decision (FID) statement, in agreement with Petrosen and the Government of Senegal, at an official ceremony last night with the Minister of Petroleum and Energies, Monsieur Mouhamadou Cisse.

“The FID on Phase 1 of the Sangomar Field Development offshore Senegal follows the receipt last week of the 25-year Exploitation Authorisation from the Government of Senegal.

“Phase 1 of the development will target estimated 2P recoverable oil reserves of 231 mmbbls (gross). 

“Over the life of the field, total recoverable oil resources are estimated to be approximately 500 mmbbls with the development also planning gas export to shore. 

“Woodside, as operator of the joint venture, has completed the purchase contract for the Floating Production Storage and Offloading (FPSO) facility and issued full notices to proceed for the drilling and subsea construction and installation contracts.”

Cairn Energy CEO Simon Thomson said: “Cairn’s discoveries offshore Senegal from the country’s first deep water wells opened up a new basin on the Atlantic Margin.

“Cairn has operated three drilling programmes and successfully laid the foundation for Senegal’s first multi-phase oil and gas development.

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

Woodside CEO Peter Coleman said: “We look forward to progressing the project towards first oil in early 2023 and expect that our experience in offshore FPSO developments will support its delivery on cost and schedule. 

“We are grateful for the ongoing support of the Government of Senegal and will be working with all stakeholders to ensure that the country’s first oil project delivers enduring benefits to its people.”

FAR managing director Cath Norman said; “This is a momentous milestone for the joint venture and the people of Senegal.

“We thank all of our stakeholders and look forward to the coming weeks and months before first oil in early 2023.”