BP has signed agreements with US upstream oil and gas company Kosmos Energy to invest nearly US$1bn and to acquire stakes in gas discoveries in Mauritania and Senegal.
BP will take over a 62% working interest, including operatorship, of Kosmos’ exploration blocks in Mauritania (Blocks C-6, C-8, C-12 and C-13); Kosmos Energy will retain 28% in the blocks, with Société Mauritanienne Des Hydrocarbures et de Patrimoine Minier holding 10%. BP will also acquire a 32.49% effective working interest in Kosmos’ Senegal exploration blocks (Saint-Louis Profond and Cayar Profond blocks); the sale will reduce Kosmos' stake to 32.51%, in partnership with Société des Pétroles du Sénégal (10%), BP (32.49%) and Timis Corporation (25%).
The blocks include the Tortue field, which may hold more than 15 tcf (423 bcm) of discovered gas resources. The company estimates the total acreage could contain around 50 tcf (1,410 bcm) of gas resources potential and more than 1 Gbl of liquids resources potential. Subject to government approvals, the agreements are expected to close by the first quarter of 2017.
Under the terms of the agreements, BP will pay Kosmos a cash bonus of US$162m on completion. Moving forward, BP will carry Kosmos’ exploration and appraisal costs of US$221m along with Kosmos’ development costs of US$533m, including front-end engineering and design studies. Project sanction is expected by 2018. Kosmos will also receive a contingent bonus of up to US$2/bbl for up to 1 Gbl of liquids, as a production royalty, subject to a future liquids discovery and oil price.