BP builds gas empire with $916 million purchase from Kosmos
LONDON (Bloomberg) -- BP agreed to buy stakes in West African licenses held by Kosmos Energy for $916 million as the British producer builds its natural-gas business following an acquisition in Egypt last month.
BP will become operator and acquire a 62% working interest in licenses at four deepwater blocks off Mauritania, as well as an effective 32.49% interest in permits at two blocks off Senegal, the companies said Monday. Kosmos will keep 28% and 32.51% of the Mauritanian and Senegalese licenses, respectively, and will remain exploration operator.
“The deal gives BP a leadership position in an emerging world-class, low-cost gas basin with advantaged access to global gas markets,” the London-based company said.
Chief Executive Officer Bob Dudley said the project “brings together all the elements” needed to create a new liquefied natural gas hub in Africa. The Mauritania-Senegal basin will become an “important profit center” according to BP’s upstream CEO, Bernard Looney. The company last month purchased 10% of Eni SpA’s Zohr field in Egypt for $375 million, giving it access to one of the world’s largest natural gas discoveries in recent times.
Larger rival Royal Dutch Shell strengthened its position in natural gas and LNG with the $54-billion acquisition of BG Group in February.
While energy exploration has slowed in Africa with the slump in oil prices, Kosmos and Cairn Energy have made discoveries off Senegal. That includes Kosmos’s mid-2015 discovery of the Greater Tortue complex, which is estimated to hold 25 Tcf of gas, according to Will Hares, an analyst at Bloomberg Intelligence.
“Kosmos is an explorer, and brings in an experienced operator with deep LNG experience and effectively funds their work program for the next several years,” Hares said.
Kosmos and BP also entered into an exploration partnership covering potential new ventures in Mauritania, Senegal and Gambia, according to the statement.
BP “brings financial capability, deepwater development and LNG expertise,” said Kosmos CEO Andrew Inglis, who was formerly BP’s upstream chief.
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