Kosmos's Ghana sale bid ‘illegal’
State-run Ghana National Petroleum Corporation (GNPC) believes Kosmos Energy's deal to sell its stake in the huge Jubilee oilfield to ExxonMobil is illegal and is ready to buy the stake itself, a GNPC source said.
Ghana has received expressions of interest from the China National Offshore Oil Corporation for Kosmos's stake, according to the source, who declined to be named. But the West African state is ready and able to make the purchase on its own, and would decide later with whom to partner.
The Jubilee field is one of the largest oil finds in West Africa in the past decade and sources said last week that ExxonMobil had reached a multi-billion dollar agreement with Kosmos to buy its stake in the field.
"We have formally notified (Kosmos) that we do not recognise whatever agreement they reached with ExxonMobil - we told them we disapprove of it because it's illegal," the GNPC source said.
The source said Kosmos had violated Ghanaian laws when it shared confidential exploration data with over 20 companies for its own commercial purposes without giving the GNPC any prior notification.
Ghana is due to start pumping oil from Jubilee in late 2010 and the country's oil finds and relative stability in a turbulent region are luring investors.
Kosmos, which is backed by private equity groups Blackstone Group and Warburg Pincus, has a 30.875% stake in the West Cape Three Points Block and an 18% interest in the Deep-water Tano Block offshore Ghana.
The source dismissed analyst doubts over whether Ghana's cash-strapped government would be able to raise the billions of funds needed to buy Kosmos's entire stake.
"We have the money ready to buy all the shares of Kosmos," the source said, adding that the GNPC was confident of acquiring the stake.
The Wall Street Journal reported yesterday that China's CNOOC was in talks with Ghana to rival ExxonMobil's $4 billion bid for Kosmos's stake in Jubilee.
The GNPC source confirmed that the CNOOC was interested.
"But as far as GNPC is concerned, that also remains only as an expression of interest, like many other companies ... It could be any company -- it could be the Chinese, it could be ExxonMobil," the source said.
Private equity-backed Kosmos owns the field with UK-based oil explorer Tullow Oil and Houston-based Anadarko Petroleum . It put its interest in the field on the market earlier this year.
Sebastian Spio-Garbrah, an analyst with the Eurasia Group, said that Ghana's government wouldn't nix ExxonMobil's deal, despite strongly favoring a deal with the Chinese that could bring along side agreements for infrastructure loans.
"The government of Ghana will nonetheless not veto the $4 billion Exxon-Kosmos deal if Kosmos is unwilling to strike a deal with the Chinese," Spio-Garbrah wrote in a research note.
"Ghana will, however, likely seek some revisions to the Exxon-Kosmos deal to accommodate its nascent national oil company and assurances from ExxonMobil that it will quickly commence development and production" of Jubilee.
ExxonMobil did not immediately have a comment. Kosmos, Blackstone and Warburg Pincus declined to comment, reported Reuters.