BP agrees $1b deal for stake in massive African offshore gasfields

BP has agreed its second huge deal in days with the energy giant revealing a near $1 billion investment in gas fields off Northwest Africa.

BP has agreed its second huge deal in days with the energy giant revealing a near $1 billion investment in gas fields off Northwest Africa.

The company has signed deals with Kosmos Energy to take a 62 per cent stake in the company's exploration blocks of gas fields off Mauritania and a 33.5 per cent holding in those off Senegal. BP will also operate the Mauritania fields.

It is thought the 33,000 square kilometres covered by the deal could contain as much as 50 trillion cubic feet (TCF) of gas, as well as more than 1bn barrels of oil in deepwater reserves.

At the upper end of the estimates, the gas reserves would be enough to fuel the UK for two decades.

The Kosmos deal, which will expand BP's presence in liquified natural gas (LNG), follows a tie-up with the Abu Dhabi government over the weekend.

On Saturday the company said the Gulf state would become one of its largest investors in return for BP acquiring a 10 per cent stake in one of the region's largest oilfields, which are forecast to produce up to 40 billon barrels during the 40-year life of deal, which has been valued at $2.2 billion.

The latest deal shows a new willingness by BP to expand its portfolio as it recovers from years of cost-cutting in the wake of the Deepwater Horizon disaster and the oil price crash.

Last month BP bought a 10pc holding in the Zohr gasfield in Egypt, swiftly followed by it taking a 3 per cent stake in Indonesia's Tangguh natural gas project.

Bob Dudley, BP chief executive, called the latest agreement with Dallas-based explorer Kosmos an "exciting strategic opportunity" to work 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," he added.

Andrew Inglis, chairman and chief executive of Kosmos, said: "BP is the right partner to help us advance the Tortue gas project at pace. We are pleased to have secured a super-major partner that brings financial capability, deepwater development and LNG expertise."

BP will pay Kosmos a cash bonus of $162 million when the deal completes, which is expected to be by the first quarter of 2017, and then cover Kosmos' exploration, appraisal and development costs totalling $754m. Once the fields are producing oil and gas, Kosmos will get a bonus of up to $2 a barrel.

To speed up development and reduce costs, gas produced by the fields will be transported to an LNG facility close to shore, which could be expanded if the fields produce enough gas to warrant it.