In the hydrocarbon sector in Africa, they are called emerging nations. In recent years, the increasing number of gas discoveries in their territories have prepared them for a destiny as major exporters.

These include Senegal, Mauritania and Mozambique. Update on the case of Mauritania, a country located in the MSGBC basin (Mauritania, Senegal, Gambia, Bissau, Guinea Conakry) whose latest discoveries of natural gas are classified in the "world class" category, which gives it the possibility of becoming a major player in global supply within the next 4-5 years. The growth derived from the exploitation of these deposits should, in time, improve the national economic and financial environment.

Already an oil producer

Unlike Senegal (mentioned in the first part of this dossier), Mauritania has been an oil-producing country since the second half of 2005. A marginal producer, however, because the country's daily production is estimated to be in the range of 4,000 to 8,000 barrels. This volume is only extracted from the Chinguetti field, located 65 km off Nouakchott.

A marginal producer, however, because the country's daily production is estimated to be in the range of 4,000 to 8,000 barrels. This volume is only extracted from the Chinguetti field, located 65 km off Nouakchott.

Production there has been in a phase of decline since 2006. When activities began, the partners were expecting full-scale production of 75,000 barrels on a daily basis. According to a document from the ministry in charge of hydrocarbons, dated September 2016, “production on this concession is subject to numerous fluctuations and is almost never stable”. The last quarter of 2016 marks the beginning of the sharp drop in on-site production. Production there averaged 4,813 barrels per day compared to 4,941 in the previous quarter. These are also the worst performance of the site since it went into production.

This poses real problems for public revenue, which almost never receives the expected oil revenues. This situation, combined with the fall in oil prices on the markets, will also weaken the operators of the perimeter who claim that the field is no longer profitable. During the year ended December 31, 2016, Sterling Energy, a partner of the Public Petroleum Corporation (SMHPM), recorded a loss of $2 million there and another of $0.97 million as of September 30. 2017. Its officials who have begun to consider a withdrawal from the field have indicated that the future value of the dismantling costs amounts to 31.4 million dollars and that they will commit to paying this sum to the government.

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Become, with the Senegalese neighbor, the African Qatar.

The British firm has no direct interest in Chinguetti, but it finances the public company which controls a 12% stake in the perimeter. The two parties therefore share the income and costs associated with this participation. In January 2018, it broke its funding agreement with SMHPM, due to the poor performance of the field. In January 2019, British oil services company Expro won a contract to supply an Intervention Elevator System (IRS) for Chinguetti plugging and abandonment.

The decline in production at the site has angered the authorities, as the site was initially scheduled to reach maturity later in the 2020s. But the research campaign taking place offshore is bringing smiles back to the authorities.

The decline in production at the site has angered the authorities, as the site was initially scheduled to reach maturity later in the 2020s. But the research campaign taking place offshore is bringing smiles back to the authorities who now have their sights set on the future.

With its gas reserves then exceeding 25 Tcf, the country is expected to become, with neighboring Senegal, the other African Qatar in the field.

Vast gas fields

As in neighboring Senegal, gas discoveries have signaled the potential for recoverable resources in excess of 25 Tcf. From 2015, Kosmos Energy and its partners will begin to seize key resources in Mauritanian waters.

Turtle-1 will be the first. It was revealed by Kosmos on the C-8 offshore block off Mauritania, which is part of the Grand Tortue complex. It is lodged at a water depth of 2,700 meters, 285 km southwest of Nouakchott.

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Turtle is the largest gas discovery offshore West Africa.

Turtle-1 was drilled to a depth of 4630 meters. The Tortue-1 well, also called Ahmeyim-1, encountered a net hydrocarbon system 107 meters long. The company also specified that it was discovered a "zone composed of three reservoirs of excellent quality 88 m thick in a hydrocarbon interval of 160 m, interspersed in the Lower Cenomanian and a fourth zone 19 m thick in a hydrocarbon interval of 150 m, in a secondary objective of the Upper Cenomanian”. This automatically makes Tortue the largest gas discovery off West Africa.

Kosmos Energy owns 60% of the production sharing contract areas of contiguous Blocks C-8, C-12 and C-13.

This automatically makes Tortue the largest gas discovery off West Africa.

The second world-class perimeter in the country is Marsouin-1. It represents Kosmos Energy's second largest gas discovery in the country. It was operated on block C-8 which is located 60 km north of Tortue-1 and preliminary results showed a net gas pay of 70 meters in Upper and Lower Cenomanian intervals containing "oil sands of 'excellent quality,' says a statement from management.

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The gas discoveries made in the large Grand Tortue geological structure are estimated, to date, at more than 50 Tcf of gas.

The Ahmeyim-2 well, located about 5 km northwest of the coast of Nouakchott, and 200 meters down-dip from the Tortue-1 well, in the Grand Tortue complex is the third most important discovery in the country. The well was drilled to a depth of 5,200 meters and encountered 78 net meters of gas in two reservoirs in the Lower Cenomanian and the underlying Albian. It is 46 meters in the Lower Cenomanian and 32 meters in the Albian.

It also demonstrates the communication of the static pressure between Tortue-1 and Guembeul-1, discovered on the same trend on the Senegalese side.

Finally, on Monday, October 28, 2019, a new drilling program by Kosmos and its partner BP, made it possible to discover a huge gas deposit in the BirAllah region in Mauritanian deep waters. This is the Orca-1 well, which according to analysts “plays out of competition” with an average first estimate of 13 tcf. It is also the biggest discovery of natural gas in deep waters of the year. It boosts the estimates of recoverable resources of the Grand Tortue Ahmeyim project. Kosmos and BP thus sign a success rate of 100% on nine wells drilled in the region. As a reminder, Orca-1 which is located about 125 km offshore, was drilled to about 5266 meters deep, in water depths of about 2510 meters. “The Orca-1 well concludes a very good year of exploration and appraisal in Mauritania and Senegal. Orca-1, which we consider to be the largest deep-sea hydrocarbon discovery in the world so far this year, once again demonstrates the quality of the Mauritanian gas basin on a global scale,” commented Andrew Inglis, the boss of Cosmos.

The gas discoveries made in the large Grand Tortue geological structure are estimated, to date, at more than 50 Tcf of gas. But geologists from Kosmos Energy suggest that the reserves could contain up to 100 Tcf of gas. This is almost three times greater than the reserves of the Zohr (32 Tcf), the largest gas field ever discovered in the Mediterranean and which has propelled Egyptian natural gas production since 2016.

But geologists from Kosmos Energy suggest that the reserves could contain up to 100 Tcf of gas. This is almost three times greater than the reserves of the Zohr (32 Tcf), the largest gas field ever discovered in the Mediterranean and which has propelled Egyptian natural gas production since 2016.

They also estimate that the perimeter contains vast deposits of black gold likely to satisfy regional demand and make Senegal and Mauritania major net oil exporters.

Senegal - Mauritania: a common gas destiny

Given that Senegal and Mauritania are recording significant natural gas discoveries on their maritime borders, they decided in April 2016 to jointly develop the gas resources of the Grand Tortue complex, located astride their maritime border. A memorandum of understanding for cooperation has been signed in this regard between the American company Kosmos Energy and the two state companies in charge of hydrocarbons, Petrosen of Senegal and SMHPM of Mauritania. Profits will be shared equally between the two parties.

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In April 2016, they decided to jointly develop the gas resources of the Grand Tortue complex.

According to analysts, "the reserves present are sufficient to transform Mauritania and Senegal into net exporters of natural gas, while satisfying the electricity and gas needs of the two countries".

"The reserves present are sufficient to transform Mauritania and Senegal into net exporters of natural gas, while satisfying the electricity and gas needs of the two countries".

Moreover, Kosmos explained that the gas extracted will produce liquefied natural gas (LNG) for emerging markets, mainly those in Asia. While the project should start between 2022 and 2023, with an initial liquefaction facility with a capacity of 2.5 Mtpa, several other liquefaction units will see the light of day in the years to follow. Together, they will increase the liquefaction capacity in Senegalese-Mauritanian waters to 10 Mtpa. Note that the first liquefaction unit will be located about 8 km off the coast of Saint Louis.

BP and Kosmos, which are piloting the project, intend to adopt a phased and small-scale approach to ensure the development of these resources. “It is the fastest and most competitive way for both countries to start LNG exports and gas deliveries to the domestic market,” explains Kosmos.

Furthermore, Kosmos has carried out an analysis which suggests that, over a period of 30 years, this first phase will contribute $30 billion to the GDP of these two countries. In Mauritania, the government estimates that this should facilitate investment in infrastructure, schools and even hospitals, with the creation of 5,000 new direct and indirect jobs.

Kosmos has conducted an analysis that suggests that over a 30-year period, this first phase will contribute $30 billion to the GDP of these two countries.

With further phases of resource development, these benefits should multiply. At the end of March 2017, the company began the second phase of its drilling program in the waters of the two countries. Kosmos Energy said it hoped to reach, at the end of this second phase, a minimum of 50 Tcf of natural gas. The operators of the Grand Tortue complex will have to produce in very deep waters, around 2700 m, and move this gas along more than 100 km of flowlines to a modular LNG production facility.

In a 2017 report, Ecobank recommended that both countries make efforts to equip the entire energy value chain with the necessary facilities for each part of the development. The institution thus highlights the construction of a new oil refinery to make the exploitation of the black gold, extracted on site, more profitable.

Mauritania is ready

Like Senegal, Mauritanian gas could enable the state to earn money through three channels: via the public hydrocarbons company, via its share in production and via taxes.

In 2006, at the start of its oil production, the country set up a sovereign fund called the National Hydrocarbons Revenue Fund (FNRH), which has a value of 300 million dollars.

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Revenues that should significantly improve the living conditions of Mauritanians

The creation of this fund comes after the country joined the Extractive Industries Transparency Initiative (EITI) in 2005. The Initiative requires the government to make public all payments received from companies investing in the oil and gas sector.

"This considerably reduces the possibility of large-scale corruption [...] Foreign companies are required to declare all payments made to the benefit of the State and are subject to public audits by international firms", explains the Mauritanian economist Isselmou Ould Mohamed.

According to Nouakchott, revenues from gas exploitation will be placed in the sovereign wealth fund and invested for the benefit of future generations. They will thus benefit from a better system of education, health, adequate infrastructure, a better economic environment, etc.