- Mauritania's offshore Chinguetti oil project has been given a go-ahead by the government and the Australian company, Woodside Petroleum. The company has pledged to invest US$ 600 million in drilling exploration and production wells in Chinguetti, and plans to start pumping oil in March 2006.
Woodside chief operating officer, Keith Spence, yesterday announced this in the Australian city of Perth. Mr Spence in a media briefing said a final agreement had been made with Mauritanian authorities, and that the Chinguetti offshore field "will be producing by March 2006, less than five years since oil was first discovered at Chinguetti in May 2001. This is a little later than the end 2005 start-up date we were previously looking for, due to the timing of vessel availability and the award of contracts," he added.
- Initial production rates are expected to be of the order of 75,000 barrels a day, Mr Spencer told the media. "Natural decline in field production is expected and, depending on field performance, a second phase of drilling on Chinguetti is planned in the second/third year of production. The field life is expected to be eight years."
Woodside expected to invest Australian $ 8370 million (US$ 600 million) in the further development of Mauritania's first oil project. "In the project's first phase, we expect to drill about 11 wells on Chinguetti," Mr Spencer explained the investments. "Six of those wells will be producers, four will be water injectors and one will be a gas injector. Development drilling is likely to commence later this year," he added.
In developing the field, the joint venture will use a floating production, storage and offloading facility with storage capacity of 1.6 million barrels. The facility will be a converted trading tanker supplied through a service agreement with Bergesen of Norway, which has developed and supplied similar floating production systems currently in use in Equatorial Guinea and Angola.
- Woodside will directly manage logistics for the main contractors from its operations base in Nouakchott, the capital of Mauritania, Mr Spencer announced. While most investments, especially in technology, mostly will benefit companies in Australia and Norway, the Nouakchott headquartering of operations is believed to be one of the main conditions set by Mauritanian authorities, which so far have come a short way in establishing a national oil sector.
The Chinguetti project is located offshore about 90 kilometres west of Nouakchott. Chinguetti, which was discovered in 2001, has "proven and probable reserves estimated at around 120 million barrels of oil," according to Woodside. The Australian company holds 54 percent of the project with Hardman Resources holding 22 percent, BG Group 12 percent, Premier Oil 9 percent and Mauritanian government-controlled Roc Oil 3.7 percent.
While production on the Chinguetti field now is assured, Mauritanian authorities and oil companies are now putting their hopes into the offshore Tiof field, which could become the country's second oil producing field. Although few exploration drills have so far be made, the sector is highly optimistic. On 14 November 2003, explorers on the Tiof discovery announced what they called "a significant new oil and gas discovery."
Chinguetti went into a short period of test production in September last year, marking the first oil production ever in Mauritania's history. Based on this test, London-based Premier Oil in January this year declared the Chinguetti oil field had proven commercial and that the joint venture having drilling right was to seek a production agreement with Mauritanian authorities.
While oil production is a novelty for Mauritania, the continental shelf of Western Africa has however attracted oil prospectors for several years, with exploration going on offshore Senegal, The Gambia, Mauritania, Western Sahara and the Canary Islands.
In Mauritania, the search for profitable oil reservoirs was initiated in 1998, when the government awarded offshore concessions to Dana Petroleum, in partnership with Hardman, Woodside and British Borneo Oil and Gas. Already in June 2000, Dana announced it had identified a number of significant hydrocarbon leads in both shallow and deepwater blocks offshore Mauritania.
Although Mauritania still doesn't have any oil production, the country is one of the West Africa's leading oil refining countries. Its downstream industry is reported to be significant to Mauritania's economy.
Mauritania, with its 2.5 million inhabitants, is struggling with widespread poverty. The country's main economic sectors - mining, fisheries and agriculture - are seen as insufficient to provide the population with wealth, although Mauritania has experienced an impressive economic growth during the last decade. Oil production could therefore have an enormous impact on the country's relatively few inhabitants.
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