Tiof Confirms Mauritania's Oil Status: The Very Recent Discovery of the Large Tiof Field Offshore Mauritania Has Now Confirmed That This West African Country Will Become a Producer of Note Next Year. Will the Windfall Revenues Lead to Improved Standards of Living?
Ford, Neil, African Business
The development of the Chinguetti and Tiof offshore oil fields, as well as spurring economic development, could open up far more of Mauritanian offshore acreage to exploration.
The long period of optimism over the attractiveness of Mauritania's Chinguetti offshore oil field has finally been justified, with an announcement by Australian firm Woodside Petroleum that the Atlantic Ocean discovery was indeed commercial and that fast track development should see production come on stream in 2005. Moreover, the company's nearby Tiof find looks like unveiling an even more impressive field and so the hydrocarbon prospects for the whole of north-west Africa may have to be reassessed.
It was the discovery of the Chinguetti field in 2001 that put Mauritania on the oil and gas map in the first place. The concession is operated by local subsidiary Woodside Mauritania and is located around 80km southwest of the Mauritanian capital Nouakchott. Oil will be produced on the field via a floating storage terminal next to the wellhead, which will allow it to be directly offloaded onto tankers.
Production is expected to peak at 75,000 barrels a day (b/d), if the development plan that has been submitted for approval to the Mauritanian government is given the go ahead.
Another Australian oil company, Hardman Resources, began exploration offshore Mauritanian waters in the 1980s and invited Woodside and other Australian firms to take a stake in the venture. Following the redistribution of shares in two concessions held by Agip Mauritania BV, equity is now divided between Woodside, with a 53.85% interest, Hardman Resources (33.23%), Roc Oil (3.693%) and Fusion (9.231%).
The partners have also uncovered a 300 metre gas column around 150km north of the Chinguetti and Tiof discoveries with the Pelican 1 exploration well. The new find suggests that oil and gas bearing sands may extend over a very large area offshore Mauritania.
While the oil industry waited for Wood-side's decision on Chinguetti, it was caught unawares by news of the Tiof find. The prospectivity of the initial Tiof discovery was confirmed by exploration work that uncovered the Tiof West extension.
Published estimates of the combined discovery vary but the field is almost certainly at least twice as big as Chinguetti. According to Hardman, Tiof contains 300-400m barrels, an estimate which boosted Hardman Resources' share price by 14%.
Ted Ellyard, the managing director of Hardman Resources, said Tiof was "much larger than the Chinguetti field, which we have previously reported to have a mean reserve size of 142m barrels recoverable." He estimated that development of the new field was around 12 to 18 months behind Chinguetti and predicted that the new field would come into production during 2007.
However, further exploration work is to be undertaken around the existing discoveries in order to determine the full extent of the field, enabling the joint venture to select the most suitable form of development. Ellyard commented: "We can expect to have several targets to drill each year over the next four to five years."
ANNUAL REVENUES OF $100M EXPECTED
The Chinguetti discovery should have a major impact on the Mauritanian economy. It is estimated that the government will generate at least $100m a year in oil revenues over the decade from 2006, a figure equivalent to 25% of current state income.
At present, iron ore mining and fishing provide the lion's share of revenues, while most of the 2.5m population pursue a subsistence lifestyle. However, as in other new African oil producers, there are fears that the money will be concentrated in a few hands at the top and that the new money streams will fail to benefit the bulk of the population.
Mauritanian human rights activist, Cheikh Saad Bouh Kamara, who has previously achieved international recognition as an anti-slavery campaigner, says: "Some, a small circle of people, will become richer. …