ERHC Energy Inc (ERHE)

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China Battles Exxon In Ghana Oil Deal - 2 Mar 2010

http://blogs.forbes.com/energysource/2010/03/02/china-blocks-exxon-in-ghana-oil-deal/

*** Just need confirmation of significant discoveries in the JDZ and we follow suit ***

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The rumors have been swirling in recent weeks over the fate of ExxonMobil's $4 billion deal to buy Dallas-based Kosmos Energy for its oil and gas finds off the coast of Ghana. "Exxon really, really wants it," says a source with knowledge of negotiations between the Texas oil giant and Ghanian officials.

The trouble is, Ghana is now being lobbied hard to force the sale of Kosmos to China's state-controlled international oil company Cnooc. According to several sources, Cnooc has hired Neil Bush, brother of President George W. Bush, to work on its behalf.

As you recall, Kosmos, with partners Anadarko Petroleum and U.K.-based Tullow Oil, pioneered a rash of big oil and gas discoveries of the coast of Ghana in the past year--including Jubilee and Tweneboa--proving out the region as a world-class hydrocarbons basin.

Ghana's government, however, feeling flush and regretting the kingly terms granted to the explorers, has blocked Exxon's entry, claimed for the government all natural gas found in certain fields, and now intends, according to a source close to the government, to form a new Ghanian national oil company. This is the government's perogative; it is common for countries to renegotiate what started as sweetheart contract terms once big reserves are discovered.

China has, of course, been aggressively pursuing oil assets in Africa, with strong positions in Angola, Sudan, and in Nigeria (where Sinopec bought out Addax Petroleum for $7.2 billion last year). Along with money, China brings to Ghana a willingness to invest in more than just oil and gas. Following the model that's worked in other African countries, Chinese contractors are busy with infrastructure projects. A source who has worked in Ghana says that a highway project there funded by the U.S. government-backed Millenium Challenge Corp. is actually being built by Chinese subcontractors. No word on when Exxon might fold its hand and call off the deal.

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