The announcement on 17 August 2010 by ExxonMobil that it was abandoning its interest-purchase of 23.5% stake in the Jubilee field, Africa's biggest offshore oil field, was precipitated by a Ghana National Petroleum Corporation (GNPC) backed-bid offer made by China Offshore Oil Corporation (CNOOC) to Kosmos Energy Limited, the largest shareholder of the Jubilee Field.

Kosmos is an exponent of the "find and sell" business model: it is set up to explore, locate and bring oil wells to production and then quickly sell to a bigger international oil company. Kosmos insists that it can stay put: after its investment of some $1.5 billion. In Jubilee, it can expect an income of $1 billion a year once production starts.

An Oil and Gas experts group, Africa Confidential, stated in an article copied to Today Newspaper, that although some interpret the move as another tactical victory for China against big western oil companies, ExxonMobil's problems were more of the company's inability to read through the politics and geopolitical dynamics of the Ghanaian oil find.

Perhaps that explains why CNOOC and other several international companies, including giant investment banks such as Goldman Sachs still had the last laugh although ExxonMobil's lawyers had sent letters threatening action against Exxon Mobil and its allies in a Texas court for 'tortuous interference' (unlawful interference with trade) should they try to propose a rival bid.

September last year, ExxonMobil signed an "exclusive and binding agreement" to buy a 23.5% stake in Jubilee Field, owned by Kosmos Energy of the United States. The stake was valued by ExxonMobil at around US$4.3 billion. However, Kosmos has been locked in a dispute with the Ghana government over data-sharing and unproven claims of criminality against its local partners in Ghana.

The exclusive and binding agreement between ExxonMobil and Kosmos floundered on the concerted opposition of the GNPC, Minister of Energy, Joe Oteng-Adjei, and ultimately, President John Evans Atta Mills.

Within two weeks, GNPC officials are due to meet and open negotiations for the purchase with private equity companies Blackstone Group and Warburg Pincus, which have a majority stake in Kosmos Energy. GNPC has retained US bankers, Morgan Stanley, and British lawyers Fresh Fields as its advisors.

CNOOC has guaranteed a $5 billion bridging loan facility to Ghana, a senior GNPC official said in Accra: "Under the arrangement, CNOOC would take 10.1% of the asset, GNPC would keep 3% and market the remaining 10.4% to a credible technical partner."

In late July, President John Atta Mills set up a committee to review the Kosmos-Exxon transaction and recommend a way to resolve the dispute between the two groups.

Chaired by ex-World Bank Vice-President, Gobind Nankani, with several senior politicians and international civil servants among its members, it took just over two weeks to talk to all the companies (including ExxonMobil) and report back to the President in early August this year, before the President embarked on his summer holidays.

The team advised the President to reject the Kosmos sale to Exxon and instead back the GNPC's efforts to raise finance, either through CNOOC or a consortium of western banks, to buy the stake direct from Kosmos and select its own technical partner for the Jubilee project.

Ghana had all along insisted that it had no intrinsic opposition to stake-bidding of the Jubilee Field by ExxonMobil, the world's biggest oil company, and even revealed that another unit of Exxon was also interested in a Jubilee Field concession currently being operated by Amerada Hess, further out to sea.

While in the USA on holiday, President Mills met assistant US Secretary of State, Johnnie Carson to dampen concerns in Washington that Accra was showing a preference for business with Beijing.

Exxon's decision to back out of the Kosmos deal livened up the markets in mid-holiday season as bankers jostled to propose financial and management structures for an alternative transaction. The leading contenders as technical partners in the consortium were Norway's Statoil ASA, BP (which had proposed an attractive joint development and training programme to Ghana, despite its crisis in the Gulf of Mexico) and Royal Dutch Shell.

Kosmos recently told GNPC that there was a 'tiny window' in which it would accept a 'realistic market-based bid' from Ghana, an official source in Accra noted.

"We hear that Blackstone and Warburg Pincus, which stand to make a fourfold profit on their backing for the Ghana oil development, would prefer Kosmos to sell soon if it could secure a market price," the source indicated.

ExxonMobil's entreaties to Accra have dragged on since last September, when a top delegation of the company surprised President Atta Mills, then in New York for the United Nations General Assembly, by telling him its company had secured a 23.5% stake in the Jubilee field in secret negotiations with Kosmos.

This infuriated GNPC officials, and thus pit them against Kosmos. Moreover, the governing National Democratic Congress (NDC) is deeply suspicious of Kosmos's local partner, EO Group, which brought the company to Ghana and secured from it a 3.5% stake in the West Cape Three Points block.

EO's Directors, George Owusu and Kwame Bawuah-Edusei, are alleged sympathisers of opposition New Patriotic Party (NPP) and close to former President John Kufuor. The two were alleged to have benefitted $200-300 million had Kosmos sold its stake to ExxonMobil. NDC officials were convinced that a substantial part of this would find its way into the NPP's campaign for the 2012 elections.

Ghanaian officials described the Kosmos's deal with EO Group as 'the original sin.' They saw the association as politically tainted and questioned why Kosmos was able to secure fiscal terms to the tune of $3.8 billion on its West Cape Three Points field in 2004 than the terms secured a year later by its counterpart, Ireland's Tullow Oil, on Deepwater Tano, an adjacent field.