Tullow Oil and Kosmos Energy have reached an agreement with the Ghanaian government to extend licenses for the West Cape Three Points and Deep Water Tano offshore oil fields to 2040, unlocking up to $2 billion in new investment for the Jubilee field, including drilling up to 20 additional wells. The deal also commits to increasing gas supply to 130 million standard cubic feet per day while reducing gas prices. Following the announcement, Tullow Oil shares rose 4.5% and Kosmos Energy shares increased 3.3%.
Tullow Oil PLC and Kosmos Energy Ltd. have secured a significant operational extension in Ghana through a memorandum of understanding with the government, extending their West Cape Three Points and Deep Water Tano offshore licenses, which host the Jubilee and TEN oil fields, until 2040. This agreement facilitates up to $2 billion in fresh investment, primarily targeting the drilling of up to 20 additional wells in the Jubilee field, thereby enhancing production and reserve potential. Concurrently, the companies have committed to increasing gas supply to approximately 130 million standard cubic feet per day, a move linked to reduced gas prices but importantly, includes guaranteed gas sale reimbursements. This development, described by Tullow's CEO Richard Miller as a "valuable step forward" ensuring "fiscal stability" and "long-term optionality," and by Kosmos' CEO Andy Inglis as "highly accretive" and adding "material reserves," signals a strengthened partnership with Ghana. The Ghanaian Minister for Energy and Green Transition, John Abdulai Jinapor, affirmed the government's commitment to a "stable and attractive investment climate." The positive market reception was evidenced by Tullow Oil's shares climbing 4.5% to 15.76p and Kosmos Energy's shares rising 3.3% to $1.88, reflecting investor confidence in the long-term value creation and de-risking of these core assets.
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