RE: BP's suspicious Senegal gas deal4 Jun 2019 10:56
The BBC programme was pretty pathetic reporting.
The fundamental rule in the E&P business is licensing the best acreage. Kosmos farmed in to Timis’ Senegal licences with this in mind and, much to their surprise found gas at Tortue, rather than oil. Kosmos realized pretty quickly they had stumbled across a huge, new gas province next to countries with small populations,undeveloped economies and tiny gas markets. Timis immediately realized he would need to find a partner with deep pockets who would take on his interest and he had to move fast - not least because he would soon be faced with gigantic bills for more drilling. Several would-be partners were contacted, including Gazprom and ExxonMobil.
According to reports, Timis initially looked to make a deal with ExxonMobil who had signed an exclusivity agreement with his company, intending to buy its stake in Saint Louis Offshore Profond and Cayar Offshore Profond.
Exxon, however, was not the only company talking to Timis and were out-manouvred by the deal between Kosmos, the operator of Tortue, and BP. Not only did the BP buy half of Kosmos’ interest in Tortue in Senegal and Mauritania, but, more importantly, became the operator. This left all Exxon’s desires to operate in the cold and they subsequently decided to cut its losses, ending its exclusivity agreement with Timis.
Now that it had shaken off its rival in the area, BP needed to deal with the consequences of its entry into Senegal’s offshore. Dakar’s discretion on the matter was mainly political: Frank Timis was part of the inner circle of the Senegalese presidency and worked behind the scenes on a ‘no win,no fee’ basis.
Predictably, Compared to how much he invested, the profit he made from the sale of his assets made waves throughout Senegal. On the other hand, bearing in mind the dysfunctional workings of Senegal when Abdoulaye Wade was President and his son Karim was working in the government, Timis was able to ‘join the dots’ and handle the transition to the new government under President Sall.
Where the wheels have come off BP’s case appears to be not so much the scale of the purchase price of Timis’ interests, but rather poor judgement on the royalty where a tiny percentage is worth a fortune. Calouste Gulbenkian played a similar role in what became Iraq, advising the Ottoman government.
Nothing to see here, move along please.
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