Liberia: Kosmos to Make Liberia Next Jubilee (Ghana field) Liberia: Kosmos to Make Liberia Next Jubilee
Monrovia — The National Oil Company of Liberia (NOCAL), in the last three months or so, has been in the public spotlight, and not for any honorable reason.
Amid the pervasive despair triggered by the financial challenges of NOCAL, there seem to be some faint but potentially strong embers flickering beneath the ashes. With a special mandate from President Ellen Johnson Sirleaf, the company is steadily undergoing reform efforts and renewed structuring and there is the news that the oil exploration business, the principal calling of the company, is not altogether quenched. There are still unresolved bidding processes still hovering over the horizon and this could be the beginning for recovery. With the bitter recession into which company has sunk in mind, policy makers are hyper-keen to eschew business as usual and make hard decisions to get the company back on track. The debate has started, and at the center of it all is the United States-based oil company, Kosmos, which has had successful jubilees in a number of countries, including Ghana, with success story in the oil sector. As The Analyst has found out, indications are clear that Kosmos is best suited for Oil Blocks 6 and 7 and is therefore earning the support of some authoritative sources.
Though news of near-bankruptcy of Liberia's oil regulatory body might have driven some stakeholders of the oil and gas sector away, there are some that still apparently feel committed their relationship with Liberia and seeking partnership and participation.
One of such is the US-based Kosmos which is once again expressing its preparedness to contest the bid for two oil blocks along the Liberian basin, Blocks LB6 and LB7.
Kosmos, according to sources, has been working on entering Liberia via blocks LB6 and LB7 for nearly three years now and during that time the company has demonstrated its seriousness in a number of ways.
Pundits familiar with the Liberian oil sector told The Analyst that Kosmos, amongst other things, participated in the roundtable Petroleum Law forums, and submitted constructive comments on the new law, hosted delegations from NOCAL at its operations in Ghana and US headquarters and even purchased and evaluated a large majority of the publicly available seismic and well database. The company visited Monrovia several times.
Some news outlines have been lifting comments of high officials of government as crediting the credentials and capacity of Kosmos as a viable and trusted oil concessionaire. They are all unanimous in the view that the company has got the right technical and financial credentials, as well as a record of success.
Profilers say Kosmos is an industry leader in frontier exploration. It works to be a long-term partner that helps to drive sustainable development, said the profilers.
"We search for oil and gas in places where others have failed or chosen not to look," the company boasts in its profile.
In 2007, Kosmos discovered the Jubilee field offshore Ghana and it has since invested more than $3 billion dollars in helping Ghana build a world-class petroleum sector.
"We led an accelerated development process that yielded first oil within 42 months of discovery," indicates the brochure of Kosmos.
Production from Jubilee field now stands at more than 100,000 barrels of oil per day and accounts for roughly 10% of the country's gross domestic product.
It is said that over the next five years, Kosmos expects to invest another $2.5 billion in follow-on oil and gas projects in Ghana.
Since the discovery of Jubilee field, the industry has tried to replicate this success and failed to do so at great cost, having drilled more than 20 wells along the West Africa transform margin.
Meanwhile, using an approach similar to that which led to the discovery of Jubilee field, Kosmos recently made a significant gas discovery offshore Mauritania, which has the potential to transform the country's economy. Mauritania also has 4 million people.
According to a factsheet, Kosmos has a market capitalization of approximately $3 billion and a strong balance sheet with $1.9 billion in liquidity. In 2015, the company expects to spend about $350 million on exploration.
Added the factsheet: "Kosmos develops strong relationships with host governments. In the past, they have brought in international experts to help countries develop regulatory frameworks, environmental standards, or stewardship policies for hydrocarbon revenues."
The company is already aligned with the Government of Liberia, as well as Liberia Extractives Industries Transparency Initiative (LEITI), to promote transparency in the oil and gas sector and beyond.
"Kosmos believes in doing its part to build a viable petroleum industry by working with governments and other organizations to train people and small businesses to work in the industry and its supply chain," the factsheet further indicates.
It added: "Kosmos embraces local content and hires qualified people. In Ghana and Mauritania, their teams are 100% local. - Kosmos invests in meaningful social projects aimed at improving public health, supporting local businesses, and building capacity."
According to the factsheet, the organization in collaboration with Safe Water Network, Kosmos' small-town water project in Ghana's western region supplies clean drinking water to nearly 27,000 people in 19 communities.
It also supports local groups, with the record of developing the capability of a young Ghanaian waste management firm, Zeal Environmental Technologies Limited, to help safely manage waste from the growing oil industry in Ghana and neighboring countries.
Kosmos also engages the local workforce in Morocco by supporting vocational training centers that target youth unemployment.
Officials of the company say they are ready to invest now while other companies are cutting their exploration programs.
Amid weak oil prices, and the failure of recent industry-wide exploration offshore West Africa, which have caused many companies to stop or significantly curtail exploration, Kosmos is ready to invest, they say.
Kosmos has reviewed Liberia's technical data and deepened its understanding of the opportunities offshore, including a new model suggesting that blocks LB6 and LB7 may be different from the blocks that failed.
The company has promised to move quickly and acquire new seismic data with the goal of confirming its concepts within 18-24 months, and potentially drilling within three to four years.