By Kwasi Kpodo
August 19, 2010 4:33 AM EDT
Oil firm Kosmos Energy announced on Wednesday it had cancelled a deal to sell its stakes in Ghana's Jubilee oilfield to ExxonMobil, an accord that met fierce resistance within the West African state.
Ghana National Petroleum Corp, the state oil company which opposed the sale to the U.S. major, said it remained keen to up its own holding in a field due to produce first oil later this year and see output rise to 120,000 barrels per day by mid-2011.
"We will continue to work with our block partners and the Government of Ghana to develop these resources," Kosmos Chief Operating Officer Brian Maxted said.
"We are very encouraged by our recent exploration results, other discoveries we are appraising, and additional developments being planned," he added in a statement.
Kosmos Energy is the operator of the West Cape Three Points Block in which it holds a 30.875 percent interest. The company also holds an 18 percent interest in the Deepwater Tano block.
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"Our focus is to ensure that Kosmos is well-positioned operationally and financially to fulfil its roles as operator of the West Cape Three Points Block, technical operator for development of the Jubilee Field, and partner in the Deepwater Tano Block," Maxted added.
Kosmos, backed by private equity firms Warburg Pincus
and Blackstone Group LP, agreed last year to sell its interests in the field to ExxonMobil for $4 billion, sources close to the deal had said.
UNNERVED
That enraged Ghanaian officials who alleged it breached a confidential accord requiring partners in Jubilee to give Ghana prior notice of any dealings with an interested third party.
Ghana's government said it welcomed Kosmos' decision to abandon the sale, and added it hoped the company would obey the country's rules if it chooses to stay.
"The government is not forcing Kosmos to leave the field, so if it decides to stay and improve its stake, so be it, as long as they do it within the laws as provided in the petroleum agreement," said Edward Bawa, an energy ministry spokesman.
The wrangle has unnerved some investors who fear it is a sign of government interference in private sector dealings, but the government of President John Atta Mills has said its main priority is to ensure Ghanaians get the benefit of the oil.
GNPC said last month it had formally rejected a request by Kosmos to sell its stake to ExxonMobil. Mills subsequently set up a committee to consider a Kosmos request for approval that was made directly to him.
The committee has since submitted its recommendation to Mills and a source close to the committee said it had found that the ExxonMobil deal would not be in the national interest.
GNPC welcomed the termination of the deal and reaffirmed its desire to boost its holdings in the field.
"We welcome Kosmos to stay, its their right to stay as rightful partners," GNPC spokesman Ntow Amoah said.
He added: "We will always position ourselves to take advantage of any opportunity to increase our stake, wherever that opportunity exists."
Ghana's prospects of becoming a major oil player were enhanced last month when Britain's Tullow Oil announced it had found a new field off its coast with qualities similar to that of Jubilee, of which it is also the operator.
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