Move Ends Talks on Chunk of Big Oil Discovery, Opens Doors for Other Players

By WILL CONNORS, SIMON HALL and DAVID WINNING

ACCRA, Ghana—Exxon Mobil Corp. said Wednesday it has canceled plans to buy $4 billion in oil assets here controlled by Kosmos Energy LLC, dealing a blow to the U.S. oil company’s drive to tap an important new oil region in West Africa and possibly triggering a scramble for a stake in a new frontier market.

“ExxonMobil has terminated the share purchase agreement with Kosmos Energy,” an Exxon spokesman said. The spokesman declined to provide further details of the talks.

The move ends fraught negotiations over a large chunk of one of the oil industry’s biggest recent discoveries and opens the door for other players—namely Chinese state-run oil company Cnooc Ltd.—to enter the Ghana oil market just months before production begins.

In June, Ghana’s state-run oil company GNPC signed an agreement with Cnooc valued at more than $4 billion to purchase the Kosmos stake, according to a person in Ghana familiar with the situation. This month, President of Ghana John Atta Mills had scheduled a meeting with the State Department’s top official for Africa, Johnnie Carson, to inform him that the government of Ghana would not approve the Exxon-Kosmos deal.

continue reading…

JOHANNESBURG—Ghana has gold, chocolate and a stable democracy. Now it also has a soccer team, backed by much of the African continent, playing in the quarterfinals of the World Cup.

Regional neighbor Nigeria has oil—and another scandal.

After Nigeria returned home with two losses and a tie in the World Cup, President Goodluck Jonathan suspended the team from international competition for two years. Presidential spokesman Ima Niboro on Wednesday also said the Nigeria Football Federation, which oversees the national team, was being investigated for corruption and misuse of funds.

The contrasting World Cup fortunes of the two soccer-loving nations, separated by the two wisp-thin countries Togo and Benin and sharing a common language, English, say a lot about the realities in each place.

continue reading…

LAGOS, Nigeria—The government of Ghana blocked the estimated $4 billion sale of a stake in a huge oil field, foiling months of talks between potential buyer Exxon Mobil Corp. and the stake’s owner, Kosmos Energy LLC.

The government accused Dallas-based Kosmos of cutting Ghana’s state-run oil company out of discussions about the field’s development and then sharing information about the field with potential buyers without government permission. The government in recent months itself has scouted for partners to work with Ghana’s oil company, including state-run China National Offshore Oil Corp.

Ghanaian Energy Minister Joe Oteng-Adjei said state-run Ghana National Petroleum Corp. would be the only entity allowed to buy the Kosmos stake in the so-called Jubilee field.

Last week, he sent a letter to Exxon informing the company that a deal with Kosmos wouldn’t receive government approval.

The letter, reviewed by The Wall Street Journal, said the government is “unable to support an Exxon Mobil acquisition of Kosmos’s Ghana assets.”

continue reading…

Oando becomes major player in African country long dominated by foreign energy companies

By SPENCER SWARTZ and WILL CONNORS

LAGOS, Nigeria—In a few months, Oando PLC, a small oil company here, is expected to take a rare step for any Nigerian company by applying for a listing on the London Stock Exchange. The move is an indication of something even more unusual about Oando: it is in position to become this oil-rich country’s first major energy company.

The Nigerian oil market has for years been dominated by major foreign players like Royal Dutch Shell PLC, whose advanced technology and know-how have allowed this West African state to become the world’s eighth-biggest oil exporting nation. But Oando, under chief executive Wale Tinubu, has bucked traditional investor views of Nigerian oil firms, most of which have little track record for being able to execute challenging oil projects.

Oando is parlaying its position as Nigeria’s leading fuel retailer—a status it built just in the last few years—into plans to be a bigger, integrated oil company. With strong management that is seen as credible to the broader investment world, Oando, which is audited by PricewaterhouseCoopers, has separated itself from a raft of other small local players.

continue reading…

By WILL CONNORS

LAGOS, Nigeria—China Petroleum & Chemical Corp. has made an offer to the Ghanaian government to jointly bid for a stake in a major oil discovery off the coast of the West Africa country, according to a person familiar with the matter.

Sinopec, represented by Neil Bush, the younger brother of former U.S. President George W. Bush, recently made an offer to the Ghana National Petroleum Corp. to form a joint bid for a stake in the Jubilee field, the person said.

GNPC officials rejected the initial offer, according to the person, and are waiting to hear from all potential partners before making a decision.

Mr. Bush couldn’t be reached for comment.

continue reading…

By Will Connors
Of THE WALL STREET JOURNAL

LAGOS, Nigeria — Kosmos Energy said Monday it signed an exclusive deal with Exxon Mobil Corp. (XOM) to sell its stake in a significant oil discovery off the coast of Ghana, the first confirmation from either company of the deal, said to be worth $4 billion.

“I can confirm that Kosmos has entered into an exclusive binding agreement with a third party (an affiliate of Exxon Mobil) in relation to the sale of its Ghana assets,” Kosmos Senior Vice President and Chief Financial Officer Greg Dunlevy said in an email to The Wall Street Journal.

The announcement comes a day after it emerged that China National Offshore Oil Corp. (CEO, 0883.HK), or Cnooc, is in advanced talks with Ghana National Petroleum Corp. to make a rival bid for Kosmos’ stake in the field, known as Jubilee.

Dunlevy did not disclose the deals’ price tag, but sources told the Journal over the weekend that the deal was worth an estimated $4 billion.

(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)

By JEFFREY MCCRACKEN, RUSSELL GOLD And WILL CONNORS

China National Offshore Oil Corp. is in advanced talks with the Ghana National Petroleum Corp. to make a rival bid challenging Exxon Mobil Corp.’s $4 billion offer for a stake in a giant oil discovery off of West Africa, said people familiar with the matter.

A GNPC-Cnooc bid, which one person said “will be competitive to what Exxon has offered,” reflects both the Chinese government’s desire to secure access to more of the world’s oil and the Ghanaian government’s to be a larger participant in the discovery, known as Jubilee.

The emergence of Chinese companies as eager bidders for global energy assets, in Ghana and elsewhere, is a significant challenge to Western oil companies’ traditional dominance. Companies such as Cnooc are backed by a government flush with foreign currency and with a growing desire to secure long-term access to commodities. Their global ambitions are strengthening the hand of oil-rich nations in their negotiations with foreign oil companies.

Exxon and Cnooc would both be vying for Kosmos Energy’s stake in Jubilee, a discovery that is estimated to hold 1.8 billion barrels of oil. With nearby discoveries in Sierra Leone, the region is emerging as a major new oil region and Ghana is expected to be an oil exporter by the end of next year. 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.

continue reading…

By Jonathan Weisman and Will Connors

ACCRA, Ghana — The first African-American president came to the continent of his father to exhort Africans on Saturday to rid themselves of corruption, embrace democracy and move from the grand, often violent, struggles of liberation and tribalism to the quieter, more potent movement of stability and economic growth.

In a half-hour speech described as a major foreign policy address, U.S. President Barack Obama stood before Ghana’s boisterous parliament, with a backdrop of festive kente cloth and adoring crowds cheering outside. The speech was broadcast on radio stations throughout the continent.

U.S. embassies in Africa held watch parties, movie theaters carried it live and what Internet access there is in Africa crackled with Twitter feeds and e-mailed snippets. The message was one that perhaps only Mr. Obama could have delivered: Africa’s excuses are over. Africans must lift themselves up.

continue reading…

(photo: AP)