Ghana's Jubilee Field Keeps Getting Bigger, and the Bidding War Does Too

(MoneyWatch)  The Jubilee field offshore Ghana may be bigger than previously thought, news that promises to ramp up exploration interest in the area and potentially complicates ExxonMobil's plans to acquire a piece of the West African oil-and-gas pie.

U.S.-based Anadarko Petroleum and the UK's Tullow Oil announced Thursday another successful appraisal well in the West Cape Three Points Block within the Jubilee field -- home of one of the largest oil finds in the past decade in West Africa.

With each successful exploration and appraisal well -- this is the eighth consecutive one -- interest in the Jubilee field and exploration prospect offshore West Africa have continued to grow. Now that one of Jubilee stake holders has put its share up for sale, that interest has boiled over into a bidding war, of sorts.

Kosmos Energy, which owns a 23.49 percent stake in the Jublilee field, recently agreed to sell its Ghana assets to ExxonMobil for reportedly $4 billion.

But private equity-backed Kosmos has other suitors -- namely state-owned Ghana Petroleum Corp. and China National Offshore Oil Company-- just as anxious to snap up a stake in the estimated 1.8 billion in reserves within Jubilee.

Interest from CNOOC and Ghana Petroleum could scuttle Exxon's plans to buy Kosmos' Ghana assets. At the very least, it complicates the deal. A leading member of Ghana's ruling party confirmed Thursday the government does not approve of Kosmos' dealto sell its stake to Exxon, Reuter reported.

And these latest results will raise the stakes even more.

This most recent appraisal well, dubbed Mahogany-4, extends the potentially productive area of Jubilee beyond its existing unit boundaries, Bob Daniels, Anadarko's senior vice president, said in a statement Thursday.

The well hit the main Jubilee reservoir and encountered new deeper oil sands, Daniels added. The Jubilee partners plan to explore these deeper oil sands, according to the Anadarko statement.

Anadarko and Tullow, which both made announcements about the recent appraisal, have not updated reserve estimates for the field. And that may be on purpose.

The decision not to update Jubilee's reserve estimates until it completes two more appraisal wells avoids making this standoff even more complicated, NCB Stockbrokers analyst Peter Hutton noted in a Dow Jones report.

For more BNET coverage on Kosmos Energy:

• Exxon Fires Up Acquisition Engine, Buys Kosmos' Stake in Jubilee Oil Field
• China Targets Addax, Kosmos in Overseas Asset Grab

Image of offshore Ghana map from Kosmos Energy