BP, Kosmos team up offshore Mauritania, Senegal
Kosmos Energy has entered into a partnership with BP in Mauritania and Senegal.
Under the terms of the agreement, BP will assume named operatorship and acquire a 62% working interest in Kosmos’ licenses covering blocks C6, C8, C12, and C13offshore Mauritania, as well as an effective 32.49% working interest in the licenses covering the Saint Louis Offshore Profond and Cayar Offshore Profond blocks offshore Senegal.
Kosmos will maintain a 28% and 32.51% effective working interest in the licenses offshore Mauritania and Senegal, respectively, and will continue as exploration operator.
Andrew G. Inglis, Kosmos Energy’s chairman and CEO, said: “Following a thorough farm-out process, BP emerged as the right partner to help us advance theTortue 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, said: “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 center for our upstream business.”
Under the terms of the agreement, Kosmos will receive fixed consideration of $916 million, including:
• $162 million in cash up front
• $221 million carry on exploration and appraisal, including a drillstem test on Tortue expected to be completed in 2017
• $533 million maximum carry on development costs until first gas production on the Tortue project, including a front-end engineering and design study to be completed in 2017 with the objective of reaching a final investment decision by 2018.
Kosmos will also receive a contingent bonus of up to $2/bbl, for up to 1 Bbbl of liquids, structured as a production royalty, subject to a future liquids discovery and oil price.
Inglis said: “The transaction strengthens our balance sheet by materially reducing our capital expenditure 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.”
Additionally, Kosmos and BP have entered into an exclusive exploration partnership covering potential new ventures opportunities in Mauritania, Senegal, and The Gambia. Kosmos will remain exploration operator of all new ventures acquired within the areas of interest, while BP will become development operator.