GAS AND POWER: Gas may provide key to upstream revival in Mauritania

• DOI: http://doi.org/10.1111/oet.12110
• Published date: 01 November 2013
• Date: 01 November 2013

GAS AND POWER

Gas may provide key to upstream revival in Mauritania

Following a series of disappointments over oil

production, which have seen output fall to less than

10% of planned levels, Mauritania is trying to revive

the fortunes of its upstream sector. This time gas

rather than oil may be the key to success. The national

oil company Soci´

et´

e Mauritanienne des Hydrocarbures

(SMH) says that several prospective areas are available

for exploration and some encouraging discoveries have

already been reported, including a gas field.

Mauritania currently produces only very small

quantities of gas. These are produced in association

with oil and are reinjected into the oil reservoir. Output

of gas is expected to cease by about 2016 as the oil field

is exhausted.

Prospects offshore

Exploration activity is concentrated on a large hydro-

carbon basin located offshore, which contains the main

oil field complex and also seems to contain significant

commercial reserves of gas. One discovery, Banda, has

already been reported commercially and another five are

being evaluated. Production is expected to begin in late

2015 or early 2016. Reserves have been estimated at 3 tril-

lion cf, which is three times Mauritania’s current proven

reserves, as estimated by the Oil & Gas Journal [1].

Mauritania’s main exploration acreage lies offshore

in a north-south arc stretching toward far south as the

border with Senegal. Gas discoveries have been reported

at both ends, including Pelican and Cormoran in the

north and Faucon in the far south. Banda lies roughly in

the middle, close to the country’s sole oil field complex

at Chinguetti. It is believed that a number of structures

are lying further out to sea in depths of 7,500-10,500 ft.

In 2012, Total signed an agreement to explore one of

these ultra-deepwater blocks, known as C9. The deep

offshore is thought to contain structures that are similar

to those found off Latin America, which have already

been shown to contain hydrocarbons.

There is another area of interest offshore in Mauri-

tania; the Taoudeni Basin, which lies in the east of the

country. A number of companies are showing interest in

the region, including Spain’s Repsol and RWE of Ger-

many. RWE states that its acreage seems to be gas-prone.

Using the gas

Gas production was originally neglected in favor of

oil due to perceived poor prospects of marketing any

gas. With a population of just 3.5 mn, the development

of a domestic gas market in Mauritania is regarded

as uneconomic, especially considering the low per

capita income and the expenses involved in building a

pipeline network to distribute gas across a large area.

In 2006, Gaz de France (GdF) was asked to examine the

feasibility of both establishing a domestic gas market

and exporting the gas as liquefied natural gas (LNG).

Neither was considered to be economic.

Gas from the Banda field is to be piped ashore to

generate electricity. There have also been proposals

for it to be supplied to a few industrial users. The

most likely industrial use would be supplying power

to mining operations that presently use oil for their

on-site needs. One possibility is to use the gas in the

gold mining complex at Tasiast, but this would probably

require a dedicated pipeline of nearly 200 mi to be built

inland.

Supplying power stations on or near the coast might

prove a more economic option rather than piping gas

into the interior of the country. The problem at present is

that Mauritania’s demand for electricity is insufficient to

justify any large-scale development of power generation.

One solution, however, may be is to supply electricity

to neighboring countries. There have already been talks

with Senegal over electricity exports and Mali is another

potential market.

OPPORTUNITIES TO THE NORTH

There is growing interest in offshore exploration just

to the north of Mauritania, in Morocco. A number

of large international companies have farmed into

acreage originally awarded to British, US, and other

small independents. Among them are the French

major, Total; Spain’s Repsol; and US firms Chevron

and Anadarko.

The latest oil major to be involved is BP, which

recently took a stake in three blocks in the offshore

Agadir Basin that were originally awarded to

Dallas-based independent Kosmos Energy. The

blocks in question are Essaouira, Foum Assaka, and

Tarhazoute. The first well is expected to be spudded

in 2014. Another prospective offshore block to

be drilled is British independent Cairn Energy’s

Cap Juby.

As with Mauritania, there are high hopes that

hydrocarbon-bearing structures that exist on the

opposite side of the Atlantic will reappear on the

African side. If this is indeed the case, there could

be an important new oil province off western Africa

stretching all the way from Morocco and Mauritania

to Ivory Coast.

©2013 John Wiley & Sons Ltd