Tuesday, February 9, 2010

Exxon Mobil (NYSE: XOM) Rejected for Ghana Oil Deal

Exxon Mobil (NYSE: XOM) Kosmos Energy

After several months of negotiating between Exxon Mobil (NYSE: XOM) and Kosmos Energy, the Ghana government has refused to allow Exxon to acquire the approximate $4billion stake they would have bought from Kosmos.

Frustration was expressed by an unnamed person close to the deal who stated the government of Ghana or its state-owned oil company shouldn't be able to "withhold consent for a technically qualified and financially capable company."

Jubilee is one of the largest oil finds in recent history, and contains the highest quality of oil the market looks for, and the stake held by Kosmos, which is funded by private-equity firms, comes in at about 1.8 billion barrels of oil.

What I found somewhat odd was that Morgan Stanley (NYSE:MS) is evidently the adviser of the Ghana government, and this smells of corruption (as usual with African governments), and it's strange that the investment banker would connect their name to the situation.

While there were a lot of assertions and excuses thrown around, in the end it was revealed that the only company that would be allowed to buy the stake owned by Kosmos would be the Ghana National Petroleum Corp., the company run by the government of Ghana.

Something is obviously wrong here, and we'll watch to see how the leaders of Ghana go forward and if Kosmos ends up really getting screwed in the end.

Exxon Mobil (NYSE: XOM) Kosmos Energy

No comments: