Press

BP agrees deal with Kosmos Energy to partner on world-class discoveries in Mauritania and Senegal and cooperate on future exploration

Posted by OilVoice Press - OilVoice

19-Dec-2016


The deal gives BP a leadership position in an emerging world-class, low-cost gas basin with advantaged access to global gas markets 

BP announced today that it has signed agreements with Kosmos Energy to acquire a 62% working interest, including operatorship, of Kosmos' exploration blocks in Mauritania and a 32.49% effective working interest in Kosmos' Senegal exploration blocks -- acreage which holds world-class deepwater gas discoveries and exploration prospectivity across both countries. 

The approximately 33,000 square kilometres of acreage covered by today's agreements includes the Tortue field, estimated by Kosmos to contain more than 15 tcf of discovered gas resources.  The total acreage, by Kosmos' estimates, could contain roughly 50tcf of gas resource potential and in excess of 1 billion barrels of liquids resource potential. 

BP will invest nearly one billion dollars mostly in the form of a multi-year exploration and development carry to acquire a 62% interest and operatorship of offshore Blocks C-6, C-8, C-12 and C-13 in Mauritania and an effective 32.49% interest in the Saint-Louis Profond and Cayar Profond blocks in Senegal. 

BP Chief Executive Officer Bob Dudley commented: "BP's entry into Mauritania and Senegal represents an exciting strategic opportunity to work with Kosmos Energy in an emerging world-class hydrocarbon basin. We believe our expertise in integrating the gas value chain, together with a talented exploration partner in Kosmos, along with the support of the Mauritanian and Senegalese governments brings together all the elements needed to create a new LNG hub in Africa." 

In order to reduce development time and drive capital efficiency, the partners plan to process and transport the gas from Tortue at a nearshore LNG facility. The proposed complex could be expanded in phases to accommodate future gas discoveries. 

Under the terms of the agreements, BP and Kosmos have also agreed that Kosmos will remain the technical operator for the exploration phase of the project and drill three new exploration wells beginning in 2017.   

In addition to the existing blocks, the companies have agreed to cooperate in areas of mutual interest in offshore Mauritania, Senegal and The Gambia with Kosmos acting as the exploration operator and BP as the development operator. 

Subject to government approvals, the agreements are expected to close by the first quarter of 2017. 

Extra notes

  • Under the terms of the agreements, BP will pay Kosmos a cash bonus of $162 million on completion.  Moving forward, BP will carry Kosmos' exploration and appraisal costs of $221 million along with Kosmos' development costs of $533 million, including front-end engineering and design studies. Project sanction is expected by 2018.  
  • Kosmos will also receive a contingent bonus of up to $2 per barrel for up to 1 billion barrels of liquids, as a production royalty, subject to a future liquids discovery and oil price. 
  • BP's proposed share of the Contractor Group results in a working interest in Mauritania consisting of Société Mauritanienne Des Hydrocarbures et de Patrimoine Minier 10%, BP 62% and Kosmos 28% and an effective working interest in Senegal consisting of Société des Pétroles du Sénégal 10%, BP 32.49%, Kosmos 32.51% and Timis Corporation 25%.



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BPKosmos EnergyMauritaniaSenegal

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