Kosmos, a Texan oil company, conducts a successful drillstem test in the Jubilee field. An ongoing investigation risks complicating efforts by Kosmos to cash in its share of Ghana's biggest field.
Originally uploaded by Pan-African News Wire File Photos
February 1, 2010 - 8:16 pm
Christopher Helman is the Southwest Bureau Chief of Forbes, based in Houston
ExxonMobil's earnings announcement today ($19 billion in 2009 net income) didn't shed any new light on the future of the company's $4 billion bid for Kosmos Energy. The rumor in oil-land is that Exxon's deal to buy Kosmos has already been scotched, and the parties are just waiting until the end of the exclusivity period to officially call it off. Dallas-based Kosmos has a juicy position in a host of newly discovered oil and gas fields off the coast of Ghana, including a quarter-stake in Jubilee, thought to hold upwards of 2 billion barrels of oil and gas equivalents.
What happened? The Ghanaian government denounced the deal from the beginning, asserting its rights to make its own preemptive bid for Kosmos. Both England's BP and China's Cnooc announced that they would be willing to sweeten the pot for Kosmos. Though BP subsequently pulled itself out of the running, the belief is that BP Chief Tony Hayward is just being patient, waiting for Exxon to leave the game before stepping up again. A joint venture of BP and Cnooc taking over Kosmos for something like $5 billion sounds about right. Exxon declined to comment on Ghana; Kosmos didn't respond to requests for comment.
Whither Exxon? Don't expect any whining from Rex Tillerson and company. In fact, Exxon might not mind losing Kosmos at all. Since the tentative deal was struck last fall, the Ghanaian government is thought to have unilaterally changed the terms of the licenses government much of the Kosmos acreage, claiming for the state all the natural gas produced from at least some of the fields. Besides, Exxon is busy orchestrating its $40 billion takeover of XTO Energy.
But don't count Exxon out of Africa yet. Earlier this month Exxon was named as one of the supermajors likely to partner with U.K.-based Tullow Oil in developing Uganda's Lake Albert Rift Basin. Since then Tullow (which is also a partner in Ghana with Kosmos and Anadarko Petroleum) has reportedly narrowed its list to China's Cnooc and France's Total. A likely scenario: within a couple years Exxon ends up buying out Tullow ($10 billion market cap) to get both its Ghana and Uganda assets. Tullow has 90% of its reserves in Africa, with other projects in Madagascar, Congo and Sierra Leone.
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