Kosmos boss looks to 1990s playbook in Africa oil hunt

Paul Burkhardt August 27, 2019

JOHANNESBURG (Bloomberg) --Tracey Henderson is returning to the corner of Africa where two decades ago she started to make her name in the oil world.

She worked in Equatorial Guinea as a young geophysicist in the 1990s, building experience in the country as she sought to unlock oil and gas reserves. Having charted a career that involves some of West Africa’s biggest discoveries, she now has a hunch there’s much more petroleum waiting to be found in the place on the continent where she started.

After taking over as chief exploration officer for Kosmos Energy in February, Henderson will lead a drilling program in Equatorial Guinea starting next month. Her team will target areas including those in which her former company Triton Energy found oil and gas at the end of the last century. For Henderson, who collected fossils at an early age, those first wells left an impression.

“It was the first commercially successful test of the Cretaceous section in West Africa,” she said, referring to a period that began almost 150 million years ago. That was the start of an “Africa-centric career.” It later became the early business plan for Kosmos -- effectively exporting the knowledge gained in Equatorial Guinea to Ghana, Benin and Nigeria.

Triton’s early wells used what Andrew Inglis, Kosmos’ chief executive officer, this month called “1999 vintage seismic survey.” Henderson worked on those and laughs when they’re seen as ancient. “I’m like, ‘hey, that’s not that old.”’ Kosmos acquired new data last year.

Triton to Kosmos

After earning degrees in geology and geophysics at the University of Texas, Henderson joined Triton in 1996. When a few employees from that company set up Kosmos in 2003, she joined them a year later.

In those days, she was usually the only woman in most meeting rooms. Thoughts about moving up the corporate ladder weren’t common, but happened after she had spent enough time at the company, Henderson said. “Early on, the gender gap was accepted as normal in the industry,” she said. “In hindsight, it’s not something that should be accepted, and acknowledging that it is a huge issue is something most companies are starting to prioritize today.”

Since it was set up, Kosmos has had some success in Africa. It was part of a group that found the Jubilee field in Ghana in 2007. Discoveries followed in Senegal and Mauritania -- in which it agreed to sell stakes to BP in 2016 -- and plans are afoot to build a massive liquefied natural gas terminal.

Still, a collapse in crude oil prices in 2014 has driven its market value from more than $4 billion to about $2.6 billion currently.

Avoid the Herd

Part of Kosmos’s strategy was to resist a herd mentality and instead go to places that were overlooked by other explorers in Africa, Henderson said.

“Equatorial Guinea, Ghana, and Mauritania and Senegal had been written off by the industry for one reason or another,” she said.

The prize of these efforts could be significant. There’s a high probability that there are at least 41 billion barrels of oil and 319 trillion cubic feet of gas yet to be discovered in sub-Saharan Africa, according to a U.S. Geological Survey report of 2016. That’s equivalent to more than five years of the U.S.’s oil consumption and about 11 years of gas.

While Kosmos has picked up licenses along the continent’s west coast to access some of these reserves, last year the Dallas-based company acquired Deep Gulf Energy for $1.23 billion, giving it acreage on the other side of the Atlantic, in the Gulf of Mexico. It has already announced an oil discovery in the region and Henderson is overseeing plans to drill other prospects this year.

“You’ve got the ability to go and explore today in what is actually a much less competitive environment than what we saw say five-seven years ago,” Henderson said. “I still think that Gulf of Mexico has some big plays yet to be opened.”

For now, Henderson, armed with new data, will spend her time back in Equatorial Guinea, trying to find oil that might have been missed by the original wells.

“It’s like it’s been sitting there in a time capsule” since her first foray into the country, she said. “I go back in and it really feels like unfinished business.”

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