By Shruti Sonal

(Reuters) - Australia's FAR Ltd said on Wednesday it will exit the troubled $4.2 billion Sangomar oil project off Senegal's shore, agreeing to sell its 15% stake to a unit of India's ONGC Videsh Ltd for $45 million.

Seeking to rebuild itself amid a downturn in the oil and gas industry, cash-strapped FAR defaulted on its project contributions in June and warned it would forfeit its interest without compensation if obligations were not fulfilled within six months.

Sangomar is a joint venture with Australia's Woodside Petroleum and Senegal's national oil company, Petrosen.

Woodside in August exercised its right to match a $400 million offer by Russia's Lukoil to buy Cairn Energy's stake in the Rufisque, Sangomar, and Sangomar Deep (RSSD) project, making it the largest shareholder.

Woodside is considering whether to match ONGC's bid for FAR's stake in the project, a Woodside spokeswoman said.

FAR's Managing Director Cath Norman said, "In these circumstances, the offer from ONGC represents the best option available at this time."

"Having been in the RSSD project for 14 years, it's a bittersweet moment to be selling our stake", she added.

Analysts said the ONGC offer could be viewed as disappointing at face value.

The deal has been undertaken at a 62% reduction to the price paid per percentage point by Woodside for the Cairn stake, said Gordon Ramsay, oil and gas analyst at RBC Capital Markets.

Exiting Sangomar would also mean giving up on a lot of oil, Ramsay added, noting the project is estimated to contain more than 5 billion barrels of oil.

"Assuming the joint venture is eventually able to get 25% out of the field, that would equate to 1.25 billion barrels (gross). That's a lot of oil," Ramsay said.

FAR said it expects to have about $130 million in cash at the close of the deal, which will be used to rebuild the company and further its other West African prospects offshore the Gambia and Guinea-Bissau.

(Reporting by Shruti Sonal in Bengaluru; Editing by Shailesh Kuber and Kenneth Maxwell)