Business News of Tue, 1 Dec 200947

Ghana talks for Jubilee at "critical stage"

Ghana's state oil company has reached a "critical stage" in talks to acquire a stake in the giant Jubilee oilfield from Kosmos Energy, a source involved in the negotiations told Reuters on Tuesday.

GNPC's interest in the prospect, part of one of the biggest oil finds in Africa poised to make Ghana a commercial exporter as soon as 2010, could scuttle Exxon Mobil's reported deal to purchase it for $4 billion.

"We are at a critical stage now and our ability to resolve certain issues at this point will pave the way for GNPC to proceed with the proposals for the acquisition," the source, a lead negotiator on the buy side, said on condition of anonymity.

GNPC and Kosmos declined official comment.

The source said the talks with privately-backed Kosmos centered around a dispute over the extent to which technical information about the Jubilee field can be passed on to other oil companies that want to buy the stake.

Resolving the issue will lay the groundwork for GNPC to make a proposal to buy it itself, the source said.

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Analysts have said it is common practice for oil companies trying to sell a property to share technical data to potential buyers, but Ghana has said it does not want those details to be spread around the industry.

Kosmos, which is backed by private equity groups Blackstone Group and Warburg Pincus , has a 30.875 percent stake in Jubilee's West Cape Three Points block and an 18 percent interest in the Deepwater Tano block.

Exxon Mobil had agreed to buy Kosmos' stake for around $4 billion, sources said in October, after beating off competition from western and Asian oil companies.

Despite widespread scepticism GNPC has deep enough pockets, the state company has repeatedly said it can buy the property on its own and a World Bank Ghana representative said he believed that appeared true.

The Jubilee field is estimated to hold as much as 1.8 billion barrels of oil. First production from the field is scheduled for the end of 2010 and output could ramp up to 150,000 barrels per day within months of that.

Source: Reuters

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