KOSMOS AND TULLOW HARDEST HIT BY CORONAVIRUS

摘要

Oil and gas firms are watching in dismay as oil prices drop because of the global coronavirus pandemic (Covid-19). While most majors have large cash reserves at their disposal to weather the storm, two leading names in African oil exploration, Kosmos Energy and Tullow Oil, have been forced to review their 2020 outlook. Kosmos Energy. Oil and gas junior Kosmos Energy, which has long been backed by American investor Warburg Pincus, has been buying up assets across the African continent since arriving in Ghana almost fifteen years ago. This spending spree has now come to an abrupt halt in Congo where it had won a bidding round for Marine XXI and XXII (see below). According to our sources, Kosmos is understood to have since informed the Brazzaville authorities that it no longer wishes to operate the two permits now that the Covid-19 crisis has sent oil prices tumbling. Kosmos currently has producing fields in Equatorial Guinea and Ghana, holds assets in development in Senegal and Mauritania and a multitude of exploration blocks in Sao Tome & Principe, Ivory Coast, Namibia, South Africa and Suriname. While some of its assets are tied up in partnerships with majors - BP in Mauritania, Senegal and Sao Tome, Shell in Namibia - it is still considerably exposed to large exploration outgoings. The group’s brand-new CFO, Thomas P. Chambers, has his work cut out for him with the current crisis, which should take a serious dent in the company finances. Kosmos’ share price on the NYSE has fallen from $6 to less than a dollar in three months. The company’s plans to sell 20 of its 30% stake in Tortue, which sits on the Senegalese-Mauritanian border, to UAE firm ADNOC, were delayed by the Orca discovery in October 2019. Kosmos no longer has any potential buyers and will be hard pressed to find one given the current context. It has also announced alongside BP that it would be postponing part of its investments on Tortue.