Kosmos Enters Accord With ExxonMobil

Kosmos Energy, one of the major partners in Ghana’s offshore Jubilee oilfields, is reported to have entered into an exclusive binding agreement with ExxonMobil for the sale of its assets in Ghana, a source close to the parties disclosed to the Daily Graphic last night.

Kosmos discovered oil in Ghana in July 2007 and is currently drilling for more oil in the West Cape Three Points offshore area.
The company also heads the Jubilee Development Integrated Project Team with the responsibility of successfully implementing its fast-track development plan for production of oil in the last quarter of next year.

Kosmos is known for its focus on finding oil and transferring its long-term development to more experienced deepwater operators.
Sources close to the parties say the transaction will be a win-win for both parties, as well as the country.

It will provide the Government of Ghana with an increased role in the Jubilee Project and the West Cape Three Points and Deepwater Tano blocks. The government has indicated its desire to increase its stake in the Jubilee Oilfields.

Industry experts have described the choice of ExxonMobil as hugely significant and far-sighted, given the unmatched technical skills, expertise, experience and technology the company has in the upstream petroleum sector, including deep water offshore operations in West Africa.

ExxonMobil will significantly strengthen the current contractor consortium and complement existing operating capability provided by the other major partners Tullow and Anadarko.

This is crucial since the Jubilee Field development is the first of many phases of a very large, highly complex and expensive oil and gas exploitation effort over the coming years.

As one close watcher of the industry puts it, “buying the asset is one thing, but the ability to fund its development is another”.
International press reports on the transaction concerning the entry of ExxonMobil into the emerging Ghana petroleum industry, quoting industry analysts, have been very positive.

ExxonMobil also offers expertise in other sectors of the petroleum industry, including downstream, and specifically refining.

Kosmos has long promised that its legacy to the government and people of Ghana would include identifying a company to take over from it, which will play a leading, long-term, full cycle role in optimising the exploitation of the oil and gas deposits in a manner that benefits the country.

ExxonMobil will bring to the project the largest integrated oil and gas company in the world and many experts are of the view that this ensures Ghana’s energy future is in the safest hands.

ExxonMobil is financially fully capable with a very strong balance sheet, which provides access to substantial, low cost of capital for future funding of the very significant development costs.

In addition, ExxonMobil is known to take a very long-term view and is expected to bring other benefits to Ghana.

The company has demonstrated elsewhere in Africa its strong focus on social and environmental responsibility, as well as a deep commitment to the training and development of the host country’s people in support of early indigenisation of the local oil and gas industry.

The decision of ExxonMobil to invest in Ghana confirms the importance of the country as an emerging major oil and gas producer and exporter and demonstrates that Ghana is an attractive investment destination.

Ghana is being watched keenly by industry players, many of whom see its actions as critical if the oil experience is to change for the better in Africa. The early conclusion of this transaction is likely to provide a significant vote of confidence in the government of Ghana.