BP to buy stakes in offshore gas projects in West Africa from Kosmos for $3.4 bn

British oil and gas giant BP Plc yesterday struck a deal to buy stakes in gas-heavy exploration areas in West Africa from US company Kosmos Energy for $3.4 billion.

The proposed acquisition comes days after BP agreed to buy 10-per cent stake in French energy giant Eni's giant Zohr offshore gas field field in for $375 million. (See: BP to buy 10% in Eni operated Shorouk concession offshore in Egypt)

Kosmos will also receive a contingent bonus of up to $2 per barrel, for up to 1 billion barrels of liquids, structured as a production royalty, subject to a future liquids discovery and oil price.

Under the terms of the deal, BP will acquire a 62-per cent stake and operational control in Kosmos' licenses covering blocks C6, C8, C12, and C13 offshore Mauritania, as well as a 32.49-per cent stake in the licenses covering the Saint Louis Offshore Profond and Cayar Offshore Profond blocks offshore Senegal.

Texas-based Kosmos will maintain a 28-per cent and 32.51-per cent stake in the licenses offshore Mauritania and Senegal, respectively, and will continue as exploration operator.

Additionally, BP and Kosmos 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.

The approximately 33,000 kms of acreage covered by the agreements includes the Tortue field, estimated by Kosmos to contain more than 15 tcf of discovered gas resources.  The total acreage, by Kosmos' estimates, could contain roughly 50tcf of gas resource potential and in excess of 1 billion barrels of liquids resource potential.

BP will invest nearly $1 billion mostly in the form of a multi-year exploration and development in the Senegal acquisition.

Bernard Looney, BP upstream CEO 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.''

''BP's entry into Mauritania and Senegal represents an exciting strategic opportunity to work with Kosmos Energy in an emerging world-class hydrocarbon basin. We believe our expertise in integrating the gas value chain, together with a talented exploration partner in Kosmos, along with the support of the Mauritanian and Senegalese governments brings together all the elements needed to create a new LNG hub in Africa,'' said, BP CEO, Bob Dudley.