Tullow Oil is to increase its stake in the Jubilee and TEN fields offshore Ghana by 7.7%, with the company having exercised its pre-emption rights to acquire Occidental Petroleum’s interest in the Deepwater Tano (DWT) block.

Tullow has pre-emption rights over the 11.05% existing participating stake in the offshore DWT Block, which Kosmos Energy acquired through the acquisition of Anadarko WCTP Company. Tullow’s equity position is to expand to 38.9% in the Jubilee field and 54.8% in the TEN field, pending permission by the Ghanaian government.

Tullow may expand production by 10% with the new ownership, generating $250 million in additional cash flow. The company’s current assets will be used to fund the transaction. The transaction is controlled by a pre-emption right operating agreement signed by Tullow and Petro SA, an upstream sector agreement that gives major players first refusal on any transfer of stake.

In a press statement, the CEO of Tullow Oli, Rahul Dhir, said: “Increasing our operated stakes in the Jubilee and TEN fields underscores our commitment to investing in and delivering our Ghana value maximization plan. This opportunity fits well with our strategy to focus on maximizing value from our producing assets. We look forward to constructive conversations with our JV Partners and the Government of Ghana as we finalize the transaction.”

Kosmos Energy and the Ghana National Petroleum Corporation (GNPC) indicated an interest in acquiring a stake in the Jubilee and TEN oilfields in mid-October, proposing to spend $550 million and $200 million, respectively, to boost Kosmos’ holding to 18% in Jubilee and 11% in TEN.

Tullow’s pre-emption of Occidental’s part of the Jubilee and TEN fields will reduce Kosmos Energy’s equity by 3.8% in Jubilee and 8.3% in TEN, respectively. The interest, on the other hand, will not reduce GNPC’s holding in each of these fields but will boost it to 13.64% and 10%, respectively.