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October 14, 2021updated 29 Nov 2021 6:46am

Occidental to sell two Ghana offshore fields for $750m

The two fields together reported net production of 22,000 barrels of oil equivalent per day in the second quarter of 2021.

By Archana Rani

Occidental Petroleum has agreed to divest its interests in two fields offshore Ghana to Kosmos Energy and Ghana National Petroleum Corporation (GNPC), for $750m.

To purchase Occidental’s interests in the Jubilee and TEN offshore fields, GNPC agreed to pay $200m and Kosmos Energy will pay $550m.

Kosmos Energy has acquired 18% additional interest in the Jubilee field and an additional stake of 11% in the TEN field, for $550. The deal with Kosmos has been completed.

The transaction has increased Kosmos’ stake to 28.1% in the TEN field and 42.1% in the Jubilee field.

The two fields, which are operated by Tullow Oil, had together reported net production of 22,000 barrels of oil equivalent per day in the second quarter of 2021.

Kosmos chairman and CEO Andrew G Inglis said: “We expect the additional Ghana interests to generate around $1bn of incremental free cash flow by the end of 2026 at $65 Brent with upside given current prices.”

The sale of assets to GNPC is planned to be completed in the fourth quarter of 2021.

Occidental plans to use to the sale proceeds to reduce its debt, which surged following the acquisition of Anadarko Petroleum for $55bn in 2019.

In an effort to reduce the debt, Occidental offloaded about $1.33bn worth of assets in Wyoming, Colorado and Utah in 2020, as well as some Colombia onshore assets for $825m.

Earlier this year, Occidental divested its acreage in the Permian basin in Texas, US, to an affiliate of Colgate Energy Partners III, for $508m.

Occidental president and CEO Vicki Hollub said: “With this transaction, we have achieved our post-Colombia divestiture target.

“Combined, our divestiture program and free cash flow generation have enhanced our ability to reduce debt, as evidenced by the $4.5bn we have repaid year to date.”

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