BP invests $1bn in huge gas field off west Africa

Oil giant BP is investing almost $1 billion (£800 million) into a 'world-class' gas field off the coast of west Africa in its second big deal within days to boost reserves.

BP chief Bob Dudley hailed the 'exciting strategic opportunity' off west Africa. Picture: Dominic Lipinski/PA Wire

The announcement came just two days after BP snapped up a 10 per cent stake in Abu Dhabi Company, giving it access to the emirate’s largest oilfields.

The latest agreement has seen BP sign a deal with Kosmos Energy to explore the Tortue field off the coasts of Mauritania and Senegal.

Under the agreement, Britain’s second biggest oil company will pick up a 62 per cent stake in Kosmos’s Mauritanian operation and 32.5 per cent of its Senegalese unit.

Meanwhile, in another significant transaction in the sector, Royal Dutch Shell unveiled the $1.4bn sale of its 31 per cent holding in Japan’s Showa Shell Sekiyu.

BP boss Bob Dudley said: “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 liquefied natural gas hub in Africa.”

BP added that the field could contain roughly 50 trillion cubic feet of gas resource potential.

Andrew Inglis, Kosmos Energy’s chairman and chief executive, who is a former head of BP’s upstream business, said: “BP emerged as the right partner to help us advance the Tortue gas project at pace and take forward a multi-well exploration program that will test the basin’s liquids potential beginning in mid-2017.

“We are pleased to have secured a super-major partner that brings financial capability, deepwater development and LNG expertise, and a vision that is fully aligned with the interests of both countries.”

It is the second gas deal in a month to be struck by BP after it acquired a 10 per cent stake in the Shorouk concession off the coast of Egypt from Italy’s Eni. BP paid $375m for the holding, which gives it access to the super-giant Zohr gas field, discovered by Eni in 2015.

As part of BP’s Abu Dhabi deal announced over the weekend, the government of Abu Dhabi will take a 2 per cent stake in BP, worth around $2.2bn.

Shell’s Japanese stake sale, to oil refiner Idemitsu, follows anti-trust approval from the Japan Fair Trade Commission. Shell will retain a 3.8 per cent stake in the company.

The deal is part of Shell’s $30bn divestment initiative. It has also sold off its Australian aviation fuel business to Viva Energy Australia for $250m.

Shell, which completed a $50bn acquisition of BG Group earlier this year, is also embarking on an ambitious cost-cutting drive as the industry grapples with an historically low oil price.

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