Kosmos Energy Closes Bid For Jubilee This Week

Kosmos Energy will accept final bids for its stake in the large Jubilee oilfield offshore Ghana this week and aims to make its final selection within weeks, a source at the Texas-based oil company has disclosed.

“There has been a lot of interest in the stake from major international oil companies and state-owned companies,” the source said, referring to top oil exploration and drilling firms like China National Offshore Oil Corporation (CNOOC), India's Oil and National Gas Corporation Limited (ONGC), Royal Dutch Shell, British Petroleum, Chevron Corporation, Exxon Mobil Corporation and Italy's Eni SpA.

It said Kosmos will close its data room this week and aims to slim down bids to a short list of around six candidates.

The Jubilee oilfield, off the coast of Ghana, is one of the largest oil resources in West Africa and is valued at US$15 billion. It holds more than one billion barrels of recoverable oil, making it one of the significant finds in recent years.

Kosmos Energy, which recently raised a total of US$800 million from private equity groups Blackstone and Warburg Pincus, has hired Standard Chartered and Barclarys Plc for the sale.

Kosmos has just over 30 per cent stake in the Jubilee oilfield in the Gulf of Guinea. Two fellow small oil contenders are involved in Jubilee; Anadarko of the US, with an equal share of the field, and UK-listed Tullow with just under 23 per cent.

The final development plan for the field has not yet been signed by the Ghanaian government and the companies.

The government has initialed the plan, but will now wait for Kosmos to conclude the final sale before signing the agreement, according to an official from the Ministry of Energy.

There has been massive interest in small oil companies in the past couple of months as the recession has seen oil companies perform well relative to other sectors, while oil falling from last year's highs created investment opportunities for some.

Heritage Oil's merger with Genel Energy and Chinese interest in Addax, while Dragon Oil sold its outstanding shares to Dubai's Emirates National Oil Companies.