ExxonMobil blocked from $4 billion buy into Jubilee Field

2/9/2010

ExxonMobil blocked from $4 billion buy into Jubilee Field

The government of Ghana has informed ExxonMobil that it does not support its estimated $4 billion buy of Kosmos Energy's stake in the Jubilee Field offshore Ghana.

In a report in the Wall Street Journal yesterday citing Ghana's Minister of Energy Joe Oteng-Adjei, the government said it will only allow the national oil company, Ghana National Petroleum Corporation (GNPC) to purchase the Kosmos interest in the field, effectively ending months of negotiations between ExxonMobil and Kosmos. As early as

October 2009, GNPC was saying the deal by ExxonMobil to buy the Jubilee Field stake held by Kosmos was illegal and that it had told Kosmos then that it would not approve such an agreement.

Oteng-Adjei told a conference in Port of Spain, Trinidad last week that Kosmos cannot decide who enters Ghana to participate in the development of the country, that such a decision is the prerogative of the government, which has its own development policies and priorities. He said the acquisition of the Kosmos stake is an opportunity for the country to benefit from the Jubilee Field, since Ghana does not have production sharing contracts and the state's 10% carried interest is small. He said the only real return to the government is in the form of taxes and royalties. This, he said, is why Ghana wants GNPC to have the Kosmos interest.

The minister told the conference attendees that his government has no interest in seizing assets from Kosmos or any other inventor. "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."

The 1.8 billion bbl Jubilee Field complex is scheduled to go on production this year at an initial flowrate of approximately 120,000 b/d of oil, that is expected to be doubled by 2013.

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