With energy giant ExxonMobil agreeing to acquire Kosmos Energy's stake in Ghana's Jubilee oil field for $4 billion yesterday, private equity firms having a majority stake in Kosmos Energy are poised to make whopping profits on their investment in a very short span of time.

Irving based Exxon Mobil, which dethroned China's oil major PetroChina yesterday to regain its ranking as the world's most valuable company, agreed to acquire Dallas-based energy exploration company Kosmos Energy LLC's 23.5-per cent stake the Jubilee oil field.

Discovered in 2007, the Jubilee oil-field, off the Ghana coast, is one of the largest offshore oil finds in the last decade in West Africa. The field is divided into two licence areas -West Cape Three Points and Deepwater Tano.

Privately held Kosmos Energy, which has oil stakes in West Africa, owns a 30.875-per cent stake of the West Cape Three Points Block and 18 per cent of Deepwater.

Tullow Oil PLC, Anadarko Petroleum Corp. and Ghana National Petroleum Corp are among the other stakeholders in the Jubilee oil field.

Kosmos had said in July 2009 that the Jubilee oil field could potentially hold 650 million barrels to 2 billion barrels of oil equivalent and that production was slated to start in late 2010, and would eventually pump about 120,000 barrels a day.

Private Equity firms, Blackstone Group and Warburg Pincus hold a majority stake in Kosmos Energy through their first round of funding of $300 million in 2004 to explore for oil and gas in Africa, and put up an additional $500 million in 2008 after the discovery of the Jubilee oil field was made in late 2007.

Their total funding of $800 million has yielded a rich bonanza of a five-fold return on investment in a short span of five years.

Kosmos had hired Barclays Plc and Standard Chartered Plc to auction its stake in Jubilee oil fields in May, which attracted oil companies like Royal Dutch Shell, Chevron Corp., ExxonMobil., Italy's Eni SpA, CNOOC of China and India's Oil & Natural Gas Corp. as well as Ghana's GNPC.

CNOOC chairman Fu Chengyu had told Reuters in August that China was bidding for the Kosmos stake in the Jubilee oil fields. The Chinese bid was reported at that time to be in the region of between $3 billion and $5 billion.

Kosmos sent a letter to the other bidders on Monday saying that the sale process has been terminated since it has entered into an exclusive binding agreement with ExxonMobil.

For ExxonMobil, with 2008 revenue of $477 billion and $15.6 billion in cash reserve as on July 2009, the $4-billion investment in Jubilee oil fields will be the oil major's biggest investment in a decade. The company needs new oil finds to replace the1.5 billion barrels of oil and gas it pumps annually.

Exxon is already one of the largest oil producers in Africa , having operations in Angola, Chad, Cameroon, Equatorial Guinea and Nigeria. It is also exploring for oil in Libya, Madagascar, the Republic of Congo and the Nigeria-Sao Tome and Principe Joint Development Zone.

But its entry into Ghana is seen as being very crucial for its West African operations since Ghana is considered a more stable country for oil sector investments than others in that region, which is notorious for rebels and guerilla attacks on Western oil majors.

Despite the instability, major oil companies are forced to go to Africa  since countries like oil-rich Russia and Venezuela have blocked foreign oil investments in favour of resource nationalisation.

Oil giant Royal Dutch Shell is the leading oil producer in Nigeria, ExxonMobil in Equatorial Guinea, Total of France in Gabon, and Chevron in Angola.