GNPC for Kosmos` stake in Jubilee Field

The Ghana National Petroleum Corporation (GNPC) is in negotiations with Kosmos Energy over the purchase of its stake in the Jubilee Fields, The Chronicle has been reliably informed.

This development comes months after the Dallas-based privately held exploration company declared its intention to sell off its 30% stake in the jubilee oil field some months ago.

The divestment is said to have so far attracted the interest of major oil players across the globe such as Shell plc, Chevron Corp., India's Oil & Natural Gas Corp., and Cnooc Ltd., which have expressed interests in acquiring the assets,

Sources say the deal, which could fetch Kosmos some $3 billion, could herald the majors' entry into Ghana's oil sector.

The Jubilee Field is one of West Africa's biggest oil strikes in years, likely containing recoverable reserves of at least 1.2 billion barrels of oil equivalent, with first output scheduled for the second half of next year - 2010.

Kosmos, which is backed by private-equity firms Warburg Pincus and Blackstone Group (BX), operates the West Cape Three Points block with a 30.875% stake, and has an 18% stake in the adjacent Deepwater Tano block.

Kosmos announced a few months ago that its deep water Mahogany-2 appraisal well, in the Jubilee Field offshore west Cape Three points Block, tested at a flow rate of 5,200 barrels of oil per day (bopd) of 36-degree API gravity crude oil, and approximately 5.5 million cubic feet per day of associated natural gas on a 40/64-inch choke, with a flowing tubing pressure of 1,543 pounds per square inch.

It is estimated that the Jubilee Field reservoirs were highly productive, which validated the company's fast-track appraisal and field development programme, thus Ghana's interest to take up the stakes attest to the fact that taking up the asset will be of immense economic benefit to the country.