Monday, October 12, 2009

Chinese & American Oil Firms Compete For Ghana Oil

China National Offshore Oil Corp. (CNOOC) and the Ghana National Petroleum Corp. (GNPC)are competing with Exxon Mobil Corp in bids for a stake in a very large offshore oil discovery off the Ghana coast, which is in West Africa. Exxon Mobil made a $4 billion offer and CNOOC is challenging with a rival bid. CNOOC is backed by the Chinese government and its chances of winning the bid are increased by partnering with the domestic oil company.

The Ghanaian government seems to be a referee in this bidding war with Kosmos insisting that, the Ghanaian government "can't be unreasonable in their refusal" regarding the bid. The Ghanaian government must ultimately sign off on any deal. The Ghanaian government did not know that Kosmos had already made a deal with Exxon.

Exxon and CNOOC are vying for Kosmos Energy's stake in Jubilee, an offshore oil discovery that is estimated to hold 1.8 billion barrels of oil. Jubilee is one of the largest oil discoveries in recent years and holds the type of light, sweet crude oil that is most sought after by global markets. Dallas-based Kosmos told bidders by letter it had "entered into an exclusive binding agreement" with Exxon to sell its 23.5% stake in Jubilee. Kosmos is partly owned by private-equity firms Blackstone Group LP and Warburg Pincus. In addition to Kosmos and GNPC, Tullow Oil PLC and Anadarko Petroleum Corp. own sizable stakes in the field, making it unclear what company would become operator of the field. (WSJ, 10/12/09)

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