The deal covers Cairn's interests in Block 16 (Sangu) and Block 16 (Exploration) in the Bay of Bengal, Santos said in a statement Thursday.
Santos is already a significant investor in Block 16, with a 37.5% interest in the producing Sangu field, which is acquired in 2007.
Subject to certain conditions, Santos expects to complete the acquisition by the end of 2010 and would then become the operator of the field.
The Sangu facilities have substantial spare capacity to process and deliver additional gas into the rapidly growing Bangladesh market, Santos said.
The acquisition is part of the company's Asian strategy of building material and sustainable businesses to meet growing domestic energy needs, Santos Vice President Asia Pacific Martyn Eames said.
"Santos has been in Bangladesh for three years and during that time we have had the opportunity to assess the operating and gas market dynamics," he added. "The joint venture has obtained free market gas rights for new volumes from producing and exploration areas in Block 16."
Santos acquired 3D seismic surveys in and around the Sangu field and on the Magnama exploration prospect in 2010, identifying a number of drilling opportunities that could be tied back to the existing Sangu facilities.
Following completion of the deal, Block 16 (Sangu) would be held and operated by Santos with a 75% stake and Halliburton with 25%. Santos would have a 100% interest in Block 16 (Exploration).
Sangu is Bangladesh's sole offshore field, and produces about 35,000 Mcf/d. The country is facing a growing gas supply shortfall, with domestic production running at around 1.98 Bcf/d, compared with demand of over 2.5 Bcf/d.
