BP said on Monday that it has signed an agreement with Kosmos Energy to acquire interests in several offshore exploration blocks on Africa’s Atlantic coast.
BP will acquire a 62 percent working interest, including operatorship, of Kosmos’ exploration blocks in Mauritania and a 32.49 percent effective working interest in Kosmos’ Senegal exploration blocks.
BP said the blocks hold “world-class deepwater gas discoveries and exploration prospectivity across both countries.”
BP will invest nearly $1 billion, mostly in the form of a multi-year exploration and development carry, to acquire a 62 percent interest and operatorship of offshore Blocks C-6, C-8, C-12 and C-13 in Mauritania and an effective 32.49 percent interest in the Saint-Louis Profond and Cayar Profond blocks in Senegal.
Kosmos will also receive a contingent bonus of up to $2 per barrel for up to 1 billion barrels of liquids, as a production royalty, subject to a future liquids discovery and oil price.
The 12,741 square miles (33,000 square kilometers) of acreage covered by the agreements includes the Tortue field.
Kosmos estimates that the Tortue field contains more than 15 trillion cubic feet (tcf) of discovered gas resources.
Kosmos estimates that the total acreage could contain roughly 50 tcf of gas resource potential and in excess of 1 billion barrels of liquids resource potential.
Moving forward, BP said it will carry Kosmos’ exploration and appraisal costs of $221 million along with Kosmos’ development costs of $533 million, including front-end engineering and design studies.
The companies expect the project to be sanctioned by 2018.
BP said that, in order to reduce development time and drive capital efficiency, the partners plan to process and transport the gas from Tortue at a nearshore LNG facility.
The proposed complex could also be expanded in phases to accommodate future gas discoveries.
Kosmos will remain the technical operator for the exploration phase of the Tortue project and drill three new exploration wells beginning in 2017.
In addition to the existing blocks, the companies have agreed to cooperate in areas of mutual interest in offshore Mauritania, Senegal and the Gambia with Kosmos acting as the exploration operator and BP as the development operator.
Subject to government approvals, the agreements are expected to close by the first quarter of 2017.
“BP’s entry into Mauritania and Senegal represents an exciting strategic opportunity to work with Kosmos Energy in an emerging world-class hydrocarbon basin. We believe our expertise in integrating the gas value chain, together with a talented exploration partner in Kosmos, along with the support of the Mauritanian and Senegalese governments brings together all the elements needed to create a new LNG hub in Africa,” BP chief executive Bob Dudley said.