By OGJ editors
HOUSTON, Mar. 1 -- Mauritania is establishing itself as a new oil and gas province and is building a reputation as an emerging deepwater play, the Edinburgh-based Wood Mackenzie said.
In a report last month, WoodMac outlined the background to the exploration success and evaluated Chinguetti, Mauritania's first oil and gas development. In addition, WoodMac compared Chinguetti's economics with other West African deepwater projects.
Chinguetti could become Mauritania's first field with production to begin as early as 2006. Early estimates were of about 100 million bbl recoverable (OGJ Online, Sept. 18, 2003).
"Exploration and licensing activity in Mauritania originally began back in the late 1960s and was dominated at that time by the major oil companies, " said WoodMac analyst Catriona Boggon. "Exploration activity was minimal, and 11 unsuccessful exploration wells were drilled prior to the companies leaving the country in 1993, due to hostilities between Mauritania and western Sahara."
After a lull in exploration activity of more than 10 years, licensing resumed in 1996 when Hardman Resources NL acquired much of Mauritania's offshore acreage.
"Since then both Woodside [Petroleum Ltd.] and Dana Petroleum [PLC], through a series of farm-in agreements, have taken equity in this acreage and are now the two main operators in the country," Boggon said.
"The other companies involved in Mauritania's upstream business are either small or mid-sized independents," she said. "ENI [SPA]'s recent exit from the country demonstrates that Mauritania is not presently a core area for the major oil companies."
But BG Group's Feb. 19 announcement that it acquired Eni's interest from Hardman Resources demonstrates that Mauritania still is an attractive new exploration and production area for a mid-sized company, she noted.
Woodside has drilled seven exploration wells and three appraisal wells in its offshore acreage, Boggon said. "This exploration activity has resulted in Woodside making three significant discoveries since 2001.
"Furthermore, Woodside recently announced that its first oil discovery, Chinguetti, is commercial, and that it plans to develop the field with first oil planned for 2006," Boggon said.
Comparing the economics of Mauritania's first oil and gas project against other West African deepwater projects of a similar size shows that Mauritania is a commercially viable place to do business in the oil and gas sector, WoodMac concluded.