US oil giant ExxonMobil has bought a stake in oil blocks off the coast of Ghana in a deal worth $4 billion.
The stake was bought from US firm Kosmos Energy, which owns just over 30 per cent in the West Cape Three Points block and 18 per cent in the Deepwater Tano block, both of which form part of the Jubilee field.
A large number of major international oil and gas companies were among bidders for the Kosmos asset.
Jubilee, which was discovered in June 2007, could hold up to 1.8 billion barrels of oil and is predicted to produce 120,000 barrels of crude a day when production commences in late 2010, which will make Ghana West AfricaÔÇÖs newest oil exporter.
Houston-based ExxonMobilÔÇÖs purchase is the companyÔÇÖs biggest investment in 10 years, which goes to highlight the significance of the oil potential on West AfricaÔÇÖs coast. Coupled with the Ghanian governmentÔÇÖs willingness to allow exploration, this makes the region an increasingly favourable hunting ground for oil companies seeking crude.
London-based Tullow Oil is JubileeÔÇÖs operator and a co-owner. The other firms owning stakes are US firms Anadarko Petroleum and Sabre Oil and Gas, as well as Ghana-based EO Group and Ghana National Petroleum Corporation.
A separate discovery off the coast of Sierra Leone last month by Texas-based Anadarko at the western end of the same geological formation as Jubilee has indicated that there may be further multi-billion barrel reserves lying through the 1,100 kilometre stretch of water running along the Ivory Coast and Liberia.
Analysts have suggested that due to the areaÔÇÖs massive potential, a takeover by ExxonMobil of either Anadarko or Tullow Oil could be on the cards. Both firms hold significant acreage in the region.
Industry insiders have suggested that the entry of a blue-chip name like ExxonMobil into Ghana will greatly benefit the region, since it is generally regarded as one of the most experienced and technically qualified oil companies in the world.
Dallas-based Kosmos is a privately held company founded in 2003, whose business model is finding oil fields such as Jubilee before selling them.
The sale to ExxonMobil is KosmosÔÇÖs first asset sale.
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