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Kosmos Energy anticipates Ghana’s FPSO will be fully funded

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After raising some concerns about the Kwame Nkrumah Floating Production Storage and Offloading (FPSO) at Ghana’s Jubilee oil fields in its S-1 filing to the US Securities and Exchange Commission, Kosmos Energy says it is anticipating that the vessel will be fully funded.

The funding of the FPSO was suspended by the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, in July 2010.

The President and Chief Executive Officer of the Texas-based oil company, Mr Brian Maxted, explained that Kosmos raised the concern in the filing because of disclosure requirements of which he says “are really small risks” even though they are potential risks.

“The funding of the FPSO is being worked out…as we speak we fully anticipates the FPSO would be funded in a way that is acceptable to all parties – so we don’t anticipate it to be an issue”, Mr Maxted told news reporters in Accra recently.

He therefore gave the assurance that oil production from the oil fields will be smooth and not interrupted.

“Nobody believes production will get interrupted,” he assures.

Ghana’s Jubilee oil fields is currently producing about 70,000 to 80,000 barrels of oil per day (bopd) and is expected to start producing about 120,000 bopd by the end of July this year, at its plateau level.

MIGA and its partners have said they are extending the suspension of the $225 million political risk guarantee contract for the FPSO managed by Japanese company MODEC.

On Thursday July 29, 2010, MIGA published a joint statement on its website announcing the suspension of the $225 million political risk insurance for the FPSO.

The statement said, “the parties agreed to this suspension in order to conduct due diligence into the conditions of a service contract between MODEC and Strategic Oil and Gas Resources (Strat Oil).”

But Kosmos Energy said the investigation of MODEC, for alleged corruption could lead to extra cost at the Jubilee oil field.

Dr. Toni Aubynn, Head of Corporate Affairs at Tullow Oil Ghana, at a Rotaract meeting held in Accra said he believes that the findings of the investigations will be positive and will not affect any production.

 

By Ekow Quandzie

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