Kosmos Energy has entered a partnership to use its exploration capabilities with BP’s deepwater development, LNG production and marketing experience at project sites in Mauritania and Senegal.
Under the agreement, BP will acquire 62% working interest in Kosmos's licences in the blocks of C6, C8, C12, and C13 offshore Mauritania along with the operatorship responsibility.
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It will also acquire an effective 32.49% working interest in the licences at the Saint Louis Offshore Profond and Cayar Offshore Profond blocks in offshore Senegal.
Kosmos will have 28% and 32.51% effective working interest in these licences respectively, and it will continue to work as an exploration operator.
Kosmos Energy chairman and CEO Andrew G Inglis said: “This agreement with BP demonstrates the value of our strategy, together with the quality of the basin we have opened offshore Mauritania and Senegal. Following a thorough farm-out process, BP emerged as the right partner to help us advance the Tortue gas project at pace and take forward a multi-well exploration programme 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.”
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By GlobalDataUnder the deal, Kosmos will receive a fixed consideration of $916m that comprises $162m in cash up-front and $221m on exploration and appraisal.
The terms of the agreement also include $533m maximum carry on development costs until first gas production on the Tortue project, including a front-end engineering and design (FEED) study to be completed in 2017 with the objective of reaching a final investment decision (FID) by 2018.
BP upstream chief executive Bernard Looney 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 centre for our upstream business.”
Kosmos will also receive a contingent bonus of up to $2 per barrel for up to one billion barrels as production royalty, subject to a future liquids discovery and oil price.
Furthermore, both companies have also entered an exclusive exploration partnership that will cover potential opportunities in Mauritania, Senegal and Gambia.
The transaction is subject to customary conditions and approvals, and expected to close during Q1 of 2017.
