Is the battle for Ghana’s newfound oil riches about to become even more complicated?

ExxonMobil has agreed to buy private equity-owned Kosmos’ 23.5 per cent stake in the massive Jubilee offshore oilfield, which is believed to hold 1.8bn barrels, for more than $4bn. But the Ghanaian government wants the national oil company, GNPC, to get in on the deal, perhaps with China’s CNOOC. GNPC argues that the Kosmos-Exxon agreement took place after data was given out to 26 prospective bidders in a ‘breach’ by Kosmos, and any bidder for the company would need to remedy that breach. Kosmos sources say the Exxon deal is done, and it is binding.

So, just to muddy the deep waters further, is BP getting involved?

Oct. 22 (Bloomberg) — BP Plc, Europe’s second-biggest oil company, may bid for Kosmos Energy LLC’s stake in the Jubilee field off Ghana’s coast and has hired Goldman Sachs Group Inc. to advise it, two people familiar with the matter said.
BP has held talks with Ghana National Petroleum Corp. about a potential joint offer for Kosmos’s Ghanaian assets, though no decision has been made, the people said, asking not to be identified because the discussions are confidential.

BP is not commenting. But there are a few dots that could be attractively joined together.

Goldman, named in the report above, was understood to be advising CNOOC when it was looking at Kosmos earlier this year. So could it be BP and CNOOC are getting together on this? BP jointly won the right to develop an oilfield in Rumaila, Iraq, with a Chinese company — though it was CNPC rather than offshore-focused CNOOC. And international oil companies teaming up with Chinese companies to produce oil in the less stable parts of the world is an increasingly common sight: Chinese companies bring access to cheaper materials, labour, a good cash supply, and a somewhat bigger appetite for risky areas (Ghana is actually one of the most stable countries in Africa, but there are fears that oil wealth might change that).

Then again, would it be worthwhile for BP to get involved in what could be a rather complicated situation involving Exxon and the Ghanaian government?

Related links:

BP said to consider Jubilee stake, hires Goldman (Bloomberg, 22/10/09)
Kosmos’ Ghana sale bid illegal: GNPC source (Reuters, 12/10/09)
Why do IOCs partner with Chinese oil companies? (FT Energy Source, 20/04/09)
A numbers game: The West African oil frontier (FT Energy Source, 16/09/09)

October 23, 2009 9:57am in Oil | Comment