Kosmos has had a busy 2017 chasing a high risk high reward oil play and working up its Senegal/Mauritania gas resources.
In the second half of the year Hippocampe and Lamantin both came in dry ending the company's campaign for higher value oil. It can now focus on developing the c.40tcf of gas found at Tortue, Teranga, Yakaar and BirAllah. It has hopefully found the right partner in BP who farmed-in in late 2016. Although not generally seen as a big gas player, BP is increasingly focussed on gas as it turns to the future - the major is shifting to investing in large scale gas projects and look to increase global production to c.60% gas from the current c.50%.
When we met with Kosmos earlier this year, they noted that they had their choice of Supermajor when seeking a partner with attractive offers from the usual suspects. Kosmos see BP as the partner who is fully aligned with them, with BP going as far as setting up Senegal/Mauritania a separate profit centre to demonstrate their seriousness.
The West African gas play continues to be derisked with the 60tcf Requin Tigre prospect being drilled and results expected in early 2018 which would increase gas resources in the basin to c.100tcf if successful. This could add a significant leg to a multi-phase LNG project. However, a dry well would dampen the high mood in the basin with the growth outlook more constrained.
FID around Tortue is planned in 2018, although success at Requin Tigre could change the development order with Tortue (which straddles the Senegal/Mauritania border) delayed. It should also be noted that gas would come onstream at a time of a gas glut with LNG in North America, East Africa and Australia coming onstream.
