After months of a stand-off between Kosmos Energy and the government over the proposed sale of a $4 billion stake in the Jubilee oilfields to ExxonMobil, Kosmos yesterday announced the termination of the relevant sale and purchase agreement.

In the face of this development, it appears Kosmos Energy's stake in the Jubilee oilfields is now open to any company that is interested.

By a letter dated August 17, 2010 and addressed to the Minister of Energy, the President and Chief Operating Officer of Kosmos Energy, Mr Brian F. Maxted, said “Kosmos Energy Ghana HC (”KEG”) wishes to advise that the sale and Purchase Agreement between KEG, Kosmos Energy Operating and ExxonMobil Exploration and Production Ghana Limited, dated June 28, 2010, has been terminated.”

Another letter dated August 18, 2010 and signed by the Corporate Affairs Manager, Kosmos Energy, Ghana Limited, Mr George Sarpong, said, "Kosmos Energy announces that the agreement with Exxonmobil related to the acquisition of our Ghana business has been terminated.

As operator of West Cape Three Points Block, we will continue to work with our block partners and the government of Ghana to develop the Mahogany East and Odum discoveries."

Mr Sarpong’s statement went on to state that the first oil from the Jubilee fields phase one development was fast approaching and the company looked forward to a fruitful and long-term relationship with Ghana.

But when reached by Daily Graphic for further comments, Mr Sarpong declined to state the reason for the termination of the agreement, pointing out that what was important was that Kosmos Energy was looking forward to a fruitful relationship with the government and its partners in the Jubilee oilfields.

Kosmos entered into the sale and purchase agreement with Exxonmobil in June 2010 before seeking the government's ratification. But the government declined on the grounds that Kosmos Energy should have given the Ghana National Petroleum Corporation (GNPC) the first option to purchase the company's shares before entering into the agreement with Exxonmobil or any other company.

The government also accused the oil company of disclosing data on the oilfields to more than 17 potential buyers contrary to the terms and conditions of its agreement with the government, but the oil company declined to make any public statement on the government accusations.

Despite the government's refusal to recognise the agreement between Kosmos Energy and Exxonmobil, the two oil companies appeared not to be prepared to renege on their agreement until the August 17, 2010 letter.

The Minister of Energy, Dr Joe Oteng-Agyei, to whom the letter was addressed, confirmed that he had received it, adding that "we respect their decision".

He also denied assertions from critics that the government had put pressure on Kosmos Energy to back out of the agreement with Exxonmobil.

The question he posed was "why would government put pressure on an investor who is exercising his rights?" and went on to state that "the government never put pressure on Kosmos Energy to sell neither did it put pressure on the company to terminate its agreement with Exxonmobil."

Dr Oteng-Agyei maintained that the government's position was that the laws of the country must be obeyed and the fact that it insisted on the right thing to be done did not mean it was up against Kosmos Energy or any investor.

The minister explained that Kosmos Energy terminated its agreement with Exxonmobil at a time the government was looking into recommendations from a committee which was set up to look into Kosmos Energy's proposal on the sale of its stake in the Jubilee oilfields.

He gave an assurance that the issues would not affect the development of the oilfields in anyway and further pointed out that the government would continue to work with Kosmos Energy and other partners "to ensure that we get our first oil by the last quarter of the year to maximise the benefit to the people of Ghana".

For his part, the Public Affairs Manager of the GNPC, Mr Kwame Ntow Amoah, told the Daily Graphic that the GNPC was still interested in purchasing Kosmos Energy's stake if the company was still interested in selling.

He also intimated that the GNPC, a partner in the Jubilee oilfields, was not in anyway forcing Kosmos Energy to sell its stake.

Kosmos Energy and its partners discovered oil in commercial quantities at the West Cape Three Points in June 2007.

Other partners in the Jubilee oilfields are Tullow Oil Ghana Limited, Anardarko, Sabre Oil, E. O Group and the GNPC.

The Floating Production Storage and Offloading (FPSO) vessel which is expected to produce, store and offload the oil at the Jubilee oilfields has berthed in Ghana’s waters.

Ghana is expected to begin commercial production of oil by the last quarter of this year.