Under the agreement, BP will assume named operatorship and acquire a 62% working interest in Kosmos’ licenses covering blocks C6, C8, C12 and C13 offshore Mauritania. BP will also acquire an effective 32.49% working interest in the licenses covering the Saint Louis Offshore Profond and Cayar Offshore Profond blocks offshore Senegal. Kosmos claims that it will maintain a 28% and 32.51% effective working interest in the licenses offshore Mauritania and Senegal, respectively, and will continue as exploration operator.
The Chairman and Chief Executive Officer of Kosmos Energy, Andrew G. Inglis, said: “This agreement with BP demonstrates the value of our strategy, together with the quality of the basin we have opened offshore Mauritania and Senegal. Following a thorough farm-out process, BP emerged as the right partner to help us advance the Tortue gas project at pace and take forward a multi-well exploration program that will test the basin’s liquids potential beginning in mid-2017. We are pleased to have secured a super-major partner that brings financial capability, deepwater development and LNG expertise, and a vision that is fully aligned with the interests of both countries.”
Bernard Looney, BP Upstream Chief Executive, added: “The Mauritania-Senegal basin is an asset with world-class scale and potential, and we look forward to working with the team at Kosmos and the governments of Mauritania and Senegal to efficiently explore and develop its full potential. We believe the basin will become an important profit centre for our upstream business.”
Under the terms of the agreement, Kosmos claims that it will receive fixed consideration of US$916 million. This includes US$162 million in cash up front, as well as US$221 million carry on exploration and appraisal, including a drill stem test (DST) on Tortue expected to finished in 2017. The fixed consideration will also include US$533 million maximum carry on development costs until first gas production on the Tortue project, including a front end engineering and design (FEED) study to be completed in 2017 with the aim of reaching a final investment decision (FID) by 2018.
In addition to this, Kosmos will receive a contingent bonus of up to US$2/bbl, for up to 1 billion bbl of liquids, structured as a production royalty, subject to a future liquids discovery and oil price.
Inglis added: “The transaction strengthens our balance sheet by materially reducing our CAPEX requirements, effectively funding our Mauritania-Senegal work program for the next several years. The enhanced free cash flow generation will enable us to continue to pursue other growth opportunities in our portfolio with discipline.”
Furthermore, both companies have entered into an exclusive exploration partnership covering possible new ventures in the Gambia, Senegal and Mauritania. Kosmos will remain as the exploration operator of all new ventures acquired within the areas of interest, whilst BP will become the development operator.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/19122016/kosmos-and-bp-announce-partnership-in-mauritania-and-senegal/