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Business News of Friday, 5 February 2010

Source: Oil & Gas Journal

Ghana blocks Kosmos-ExxonMobil deal

PORT OF SPAIN, Feb. 5-- Minister of Energy Joe Oteng-Adjei denied Ghana would take by force Kosmos Energy LLC’s interest in Jubilee oil field, but the company will not be allowed to sell its stake to ExxonMobil Corp.

Speaking in Port of Spain at an energy conference, Oteng-Adjei said Ghana National Petroleum Corp. (GNPC) is interested in purchasing Kosmos’ stake in Jubilee field and has the government’s full backing.

Kosmos planned to sell its interest to ExxonMobil in a deal valued at $4 billion.

Oteng-Adjei told the conference, “What we are saying is that this is an opportunity for us as a country to benefit. What we are saying is that Kosmos as an investor has a fair value to the assets they have invested in, but Kosmos cannot decide on who enters into the country to participate and join with us in the development of our country.”

He said Ghana has its own development policies and priorities.

Oteng-Adjei tried to calm fears of oil and gas producers at the conference, telling them investors are safe in Ghana and his country has no interest in taking away assets of Kosmos or any other investor. He said, “We allow every investor to get a fair value of return on their assets and investments that they put into the country. We want to work with them to ensure that whoever they bring into the country is mutually acceptable. But they have no right to impose on us anybody, any entity that does not share our development policies.”

Tullow Oil PLC operates Jubilee field, which was discovered in 2007 in deep water off Ghana. It estimates Jubilee is a continuous stratigraphic trap with combined hydrocarbon columns in excess of 600 m, with 600 million-1.8 billion bbl of recoverable hydrocarbons.

Oteng-Adjei said Ghana does not have production-sharing contracts, and the carried participation by its state oil company is 10%. He said the only real return to the government was in taxes and royalties. This is one reason Ghana wants GNPC to obtain Kosmos’ stake, he said.

Oteng-Adjei said other Jubilee field partners have the financial and technical competence to compete the project even if Kosmos is not part of the consortium.

Tullow holds a 34.7% stake in Jubilee, while Anadarko Petroleum Corp. and Kosmos each hold 23.49%. Sabre Oil & Gas Ltd. holds 2.81, and EO Group has 1.75%.