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Business News of Friday, 13 November 2009

Source: Bloomberg

Chinese Compnay Not Allowed by Ghana to Bid for Jubilee Stake

Cnooc Ltd., China’s largest offshore oil producer, said the Ghanaian government hasn’t allowed it to bid for Kosmos Energy LLC’s assets in the African nation.

“We haven’t participated as the government doesn’t allow us to,” Fu Chengyu, chairman of the Chinese energy explorer, said in an interview in Beijing today. Asked if Cnooc has dropped plans to buy Kosmos’s stake in the offshore Jubilee oilfield, Fu said: “You can’t say it that way.”

Fu’s comments come after a spokesman for Ghanaian energy ministry said Oct. 14 talks were held with Chinese oil executives and there had been contact with Cnooc. Ghana asserted its “absolute” approval rights over exploration after U.S.-based Kosmos said Oct. 12 it had signed a binding agreement to sell the share to Exxon Mobil Corp. State-owned Ghana National Petroleum Corp. has said it plans to acquire the stake and will consider proposals for partnership from foreign oil companies.

Cnooc “can easily get the stake from the Ghanaian government if that’s what they want,” Brynjar Eirik Bustnes, a Hong Kong-based energy analyst at JPMorgan Chase & Co, said by telephone today. “It’s pretty straightforward.”

Ghana’s nascent petroleum industry, still a year away from production of oil for export, has attracted attention from some of the world’s top energy companies in what has become a tussle for the 1.8 billion-barrel Jubilee, discovered in June 2007. Ghana expects to pump 500,000 barrels of oil a day by 2014.

Kosmos said on Oct. 12 that it agreed to sell its Ghanaian assets, including a 23.49 percent stake in Jubilee, to Exxon. The deal is estimated by a person familiar with the sale to be worth at least $4 billion.

China, the world’s second-largest energy-consuming nation, is buying into oilfields overseas including Africa to secure fuel for its economy, which expanded 8.9 percent in the third quarter from a year earlier.