BP And Kosmos Sanction West African LNG Project

BP plc (NYSE:BP) teamed up with Kosmos Energy Limited (NYSE:KOS) to develop a massive offshore gas field that is located between Senegal and Mauritania in West Africa. Liquefied natural gas technology is being utilized to commercialize those resources, as the sheer size of the Tortue gas field means those supplies need to gain access to hungry customers in Asia and Europe. For Kosmos Energy Limited, this development is its largest ever and marks the beginning of its journey to becoming a medium-sized upstream player in the offshore conventional world. For BP plc, this development is part of its ongoing strategy to shift its upstream production mix from a 50/50 split between oil & gas to one that is 40% oil and 60% gas by the 2020s. Let's dig in.

The discovery

Kosmos Energy discovered the offshore Tortue gas field back in April 2015 through the Tortue 1 exploration well. Subsequent appraisal activity indicated the prospect was one large gas field. The discovery was rebranded as the Greater Tortue Ahmeyim complex, which consists of Tortue West, Tortue East, and Tortue North reservoirs. Kosmos Energy, as the operator of the exploration side of the venture, estimates the field houses at least 15 trillion cubic feet of recoverable natural gas resources. There is room for upside as the Greater Tortue Ahmeyim complex may house up to 50 Tcf of recoverable gas resources and an additional 1 billion barrels of recoverable liquids hydrocarbons (condensate and liquefied petroleum gas).

Due to Kosmos Energy's exploration success, BP bought into the play in late-2016 in a deal valued at almost $1 billion at the time. BP will be the operator of any development activities at the play, and Kosmos Energy will remain operator of the exploration activities.

Source: Seeking Alpha