Ghana has not blocked Kosmos-ExxonMobil deal, but threatens to if…

Ghana is said to have denied blocking the deal between Kosmos Energy and ExxonMobil, but threatens to do so if the parties do not abandon the deal, the Reuters reported quoting unnamed government sources.

The report citing an earlier report by the Wall Street Journal Tuesday  which said that the government had blocked the deal, indicated that the government of Ghana has written to ExxonMobil about the deal but had not gone beyond repeating the threat.

ExxonMobil was reported to have offered $4 billion for Kosmos Energy’s 30% stake in Ghana’s largest oil field, the Jubilee oil field, but the approval of the government of Ghana which could have sealed the deal was never given, as the government expressed interest in buying the stake.

But a source close to the Ghana National Petroleum Corporation (GNPC) has told ghanabusinessnews.com that Kosmos Energy broke the law when it opened its data room secretly to ExxonMobil without the prior consent of all the parties in the agreement as the laws of Ghana stipulates.

According to the terms of the agreement for all the parties with stakes in the field, any one party that decides to sell its stake should give one party within the deal the first option.

Asked why he thought Kosmos Energy would breach the term of agreement, he said, “my understanding was that Kosmos did that to speculatively raise its bid higher, so that in case one of the parties shows interest in the stake, it couldn’t offer a lesser bid.”

The Jubilee oil field is the largest oil field to be discovered in West Africa in the last 10 to 15 years. According to Tullow Oil, the majority stakeholder, it has 17 wells.

Commercial production of oil in Ghana is expected to begin this year.

By Emmanuel K. Dogbevi