Sale of Kosmos Energy stake in Ghana: India hires Citi for advise

oilWould Kosmos Energy sell its stake in Ghana’s Jubilee oil field or not? This is a question oil industry watchers are interested in knowing.

Ever since the issue came up, the closely-guarded Texas-based Kosmos Energy has not said anything specific on the matter. When the news first broke, Kosmos Energy officials denied that they were selling, but the matter has persisted. Mostly information about the sale has come from insiders privy to the sale.

Latest news however say, India’s state-run oil and gas company, Oil & Natural Gas Corporation (ONGC) which has been named as one of the companies interested in buying the stake has hired Citigroup to advise it on a bid for Kosmos Energy’s stake in Ghana’s Jubilee oil filed. The report by Reuters estimates the deal to be between $3 billion and $5 billion.

Kosmos Energy has received private equity funding worth $800 million from Blackstone and Warburg Pincus and has hired Standard Chartered and Barclays Plc to sell its stake in the Jubilee filed. The company recently received a $750 million loan facility from the IFC to fund development of the discoveries. It also gained approval from the Ghanaian government for a phase-one plan of development for the field.

Sources say, the deadline for the initial bid closed last Friday, but has been extended for another 30 days.

Other parties interested in buying the stake of Kosmos Energy in the largest oil field to be discovered in West Africa in the last 10 to 15 years include Ghana’s state-owned oil and gas company, the Ghana National Petroleum Corporation (GNPC).

Ghana’s deputy Energy Minister, Kwabena Donkor was quoted by the Bloomberg news service as saying, “if they sell, the national oil company will buy their stake.” GNPC has a 10% stake in the oil field which according to Tullow Oil, one of the partners has about 1.8 billion barrels of oil and has 17 wells.

The China National Offshore Oil Company (CNOOC) has also been reported to have made a bid of about $4 billion for the stake.

Royal Dutch Shell has been reported to have looked into the Kosmos Energy data room and showed interest in buying the stake.

Other companies that have been cited to be interested in the stake include, Chevron Corp., ExxonMobil Corp., and Italy’s Eni SpA.

By Emmanuel K. Dogbevi

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