Ghana to buy Kosmos Energy’s Jubilee stake

Ghana is interested in buying Kosmos Energy’s stake in the Jubilee oil field, the Bloomberg news service has reported.

According to the report the state-owned oil and gas company, the Ghana National Petroleum Corporation (GNPC), may buy Kosmos Energy’s stake in the $3.1 billion Jubilee oil field.

The report quoted Ghana’s Deputy Energy Minister, Kwabena Donkor as saying in an interview Tuesday July 7, 2009 in Cape Town that, “If they sell, the national oil company will buy their stake.”

Kosmos, a closely held company based in Dallas, owns about 30 percent of the Tullow Oil Plc-led venture that manages the field’s development. Barclays Plc and Standard Chartered Plc were appointed to auction Kosmos’s holding, the Sunday Times reported May 11, without saying where it got the information, it said.

Ghana expects to produce about 500,000 barrels of oil a day by 2014, but the country hasn’t completed Jubilee’s development plan because it is still in talks with partners, Donkor said.

Ghana is set to become one of Africa’s newest oil exporters in June 2010 when production begins at the offshore Jubilee field, which was discovered in June 2007 and has potential resources of as much as 1.8 billion barrels, according to Tullow.

The partners in Jubilee, which also include Anadarko Petroleum Corp., have “legal rights to preempt” any deal for Kosmos’ stake, Tullow Chief Executive Officer Aidan Heavey said May 12. He declined to say if Tullow plans to increase its stake in the project, saying any decision will depend on the offer value.

Royal Dutch Shell Plc is looking at opportunities in Ghana, Regional Vice President for Exploration and Production in Africa, Babs Omotowa, said in an interview in Cape Town Tuesday. He declined to be more specific. Dow Jones reported on June 18 that Shell may buy Kosmos’ stake in Jubilee, Bloomberg said.

The GNPC on June 30 said it hired Morgan Stanley to advise on some offshore oil and gas deposits, without giving more information.

There have been reports indicating that Kosmos Energy was putting up its stake in the Jubilee oil field for sale. The Jubilee field is the largest to be discovered in West Africa in the last 10 to 15 years .

Kosmos Energy has not made any public pronouncements on the sales plan, but the reports have persisted.

On June 11, the China National Offshore Oil Company (CNOOC) was reported to be seeking to bid about $4 billion for a 30% stake in the Jubilee field of Kosmos Energy.

Attempts by ghanabusinessnews.com to get the reponse of Kosmos Energy on the matter were unsuccessful as calls were never returned by employees after promises were made to.

Meanwhile, the Financial Times reports that Ghana is looking for a large international oil company to join a bid for a stake in the Jubilee field.

The move, the  publication said opens the door for western oil groups, under pressure to secure access to new resources, to enter an area seen as having huge potential for development.

Citing the govenrment of Ghana’s frustration in the ongoing oil exploration project, it said, Ghana has been concerned that its interests are not being adequately respected in the sale process, which is being run by Standard Chartered and Barclays Capital.

The recently elected government, the Finacial Times said feels it has not been kept sufficiently well-informed about the negotiations, which have been known about in the industry since the end of last year. The country has no experience of managing oil reserves, it added.

Joe Oteng-Adjei, Ghana’s energy minister, has told the Financial Times that the country was looking for a “win-win” solution to reward investors in Kosmos while maximising Ghana’s potential. “We are committed to doing the right thing for investors and for the country,” he said. “Our concern is that we bring in a third party to deliver the synergies that we expect.”

By Emmanuel K. Dogbevi