CNOOC and GNPC bid $5 billion for Kosmos Ghana assets: source

By Michael Flaherty

HONG KONG (BestGrowthStock) – China’s CNOOC (0883.HK: ) and Ghana National Petroleum Corp (GNPC) have bid $5 billion for Kosmos Energy LLC’s assets in the West African state, including its stake in the Jubilee field, a source close to the deal said on Friday.

The offer tops an earlier, failed bid of more than $4 billion from Exxon Mobil (XOM.N: ) for the Kosmos assets, which includes a coveted 23.49 percent stake in a large, Ghana oil discovery known as the Jubilee field.

CNOOC and domestic rivals Sinopec (0386.HK: )(600028.SS: ) and PetroChina (0857.HK: )(601857.SS: ) have all been chasing global energy assets hard there in their race to feed China’s rapid growth.

“PetroChina, Sinopec and CNOOC have all had an international strategy for a while now, which is to go out there and do deals where they can,” said Tan Kim-Chong, an analyst at Yuanta Research in Hong Kong.

“There’s a limit to how much they can produce domestically, and they now need to go out there to look for fields that they can still buy at a reasonable price.”

In the latest deal in Ghana, Kosmos, backed by private equity firms Blackstone Group and Warburg Pincus, has been trying to auction off the stake for more than a year, with CNOOC a persistent bidder.

A CNOOC spokesman could not immediately be reached for comment.

The bid comes just two weeks after China National Offshore Oil Co (CNOOC) agreed to pay $1.1 billion for a stake in a U.S. shale oil and gas field, as the company looks for new oil sources to help it meet aggressive output targets.

“CNOOC’s own assets are probably being squeezed too hard … so they have to go abroad to buy things to give CNOOC a future,” said Laban Yu, an analyst at Macquarie Research.

“So they are willing to pay high premiums for these assets and there will be benefits to China as a country to secure energy supply. But it will not be beneficial to shareholders,” he said.

State-owned Ghana National also is holding preliminary talks with Statoil ASA, seeking to interest Norway’s largest oil company in becoming a third partner in a Kosmos bid, according to Bloomberg, which added that BP (BP.L: ) had also been looped into the talks but decided not to advance.

Last month media reported that Kosmos, a Texas-based oil and production company, was considering an initial public offering that would value that company at about $5 billion.

Bloomberg said on Friday that Kosmos was working with Citigroup and Credit Suisse on the IPO plans. The banks could not immediately be reached for comment.

CNOOC SHARES SAG ON LATEST DEAL

CNOOC shares, which jumped after the U.S. shale oil deal earlier this month, were down 0.75 percent midway through the Hong Kong trading day, lagging the broader market which was down 0.16 percent.

CNOOC (CEO.N: ) had been a noticeable absentee from overseas M&A since it paid $2.7 billion for a stake in French oil major Total’s (TOTF.PA: ) African Akpo field in 2006.

A year earlier, it was bumped by a U.S. political backlash from buying U.S.-based oil company Unocal. Analysts had begun to question the group’s bullish production growth forecasts, pushing CNOOC to seek more outbound deals.

The Ghana field holds an estimated 1.8 billion barrels of crude.

Most outbound acquisitions by China’s oil companies this year have been in risky areas such as Africa, which Western rivals have avoided, or in locations with aging assets.

The 10 deals so far this year for China’s oil and gas companies have been worth $18.6 billion, already eclipsing the $15.8 billion in deals for all of 2009, according to Thomson Reuters data.

(Additional reporting by Alison Leung and Kelvin Soh; Writing by Doug Young; Editing by Lincoln Feast)

CNOOC and GNPC bid $5 billion for Kosmos Ghana assets: source