Kosmos withholds Jubilee sale, goes into drilling

Kosmos Energy has withheld the sale of its 30 percent stake in Jubilee Oilfield. For the first time in its history the energy firm is venturing into the drilling of oil after so many years of exclusively exploring the commodity, sources close to the company have disclosed to BUSINESS GUIDE.

This has been accentuated by the company’s agreement which ended in January 2010 without a substantive buyer. Kosmos Energy had wanted to sell off its stake in the Jubilee Oilfield off West Cape Three Points to ExxonMobil for an amount of $4 million but Government intervened with objections describing the development as illegal.

Government on the other hand, wanted the concession to go to China National Offshore Oil Company (CNOOC), leading to a misunderstanding between it and Kosmos.

Indications therefore are that Kosmos Energy is streamlining its arrangements with Tullow Oil over its new ambitions in order to engender a smooth drilling operation.

In January, this year, the Financial Times (FT) reported that the Texas-based oil and gas exploration company was being investigated for corruption by US and Ghanaian officials.

According to the report, the authorities were looking into allegations of a relationship involving Kosmos and its local partner EO, that helped the US oil company to secure control of the Jubilee oil field. EO is supposedly a company owned by two political allies of former President John Agyekum Kufuor.

The FT continued that the case risked complicating efforts by Kosmos Energy to sell its stake in the Jubilee oil field to another Texas-based US oil company, ExxonMobil, in a deal valued at $4 billion. But Kosmos denied any wrongdoing.

Though FT said Ghana was preparing to file criminal charges against EO, nothing has ever since been heard about it.

A privately-held international oil exploration and production company focused on emerging and frontier basins offshore West Africa, Kosmos is led by a seasoned management and technical team formerly with Triton Energy - Jim Musselman and Brian Maxted.

The team has a proven track record of discovering and developing significant oil and gas reserves offshore West Africa and in other international basins. Warburg Pincus led the company’s initial $300 million equity financing in 2004, and also led a $500 million follow-on equity financing in 2008.

Since formation, Kosmos has experienced significant exploration success with two sizable oil discoveries that include Jubilee Field, the first commercial discovery in Ghana and the second largest discovery worldwide in 2007.

Kosmos is currently working with its industry partners to plan for the development of Jubilee Field and also continues to evaluate its large acreage blocks in other countries in West Africa.