Interview with the Director General of Hydrocarbons on the situation and outlook for the energy sector in Mauritania

Mauritania is a future producer and exporter of natural gas, thanks to recently discovered reserves in the coastal basin, notably the GTA and BirAllah fields.

The first of the GTA fields, shared with Senegal, is due to come on stream at the end of 2023, with total protection of 2.5 tonnes of LNG per year.

The Mauritanian government is also planning to launch new gas and oil projects in the coming years, principally BirAllah and Banda.

Ongoing exploration work could also confirm new hydrocarbon discoveries off the Mauritanian coast.

In this context, TAQA was honoured with an interview with Moustapha Bechir, Director General of Hydrocarbons at the Ministry of Petroleum, Mines and Energy, in which we discussed the situation and prospects for the energy sector in Mauritania.

TAQA: Phase 1 of the GTA field is due to come on stream in the 4th quarter of this year. In your opinion, is there still enough time to complete the development work?

Yes, we are still on schedule to produce our first drop of gas between the end of 2023 and the beginning of 2024. The first was the departure of the FPSO (Floating Production Storage and Offloading), the facility responsible for gas pre-treatment, storage and condensate export, from Cosco’s fabrication yard in Quidong, China, on 20 January 2023. The second is her departure from Singapore on 12 May 2023 bound for our territorial waters after having stayed there to carry out some additional work.

Another expected date is the departure, in the last quarter of 2023, of the FLNG (Floating liquefied natural gas), which is the LNG liquefaction, storage and loading unit from Singapore to the hub on the Mauritania-Senegal border. The presence of the two vessels on site and the timely completion of the connection work will enable the first gas target date to be met.

As for the other components of the project, the four wells required for the first phase have already been drilled, completed and cleaned up since January 2023, and are ready for production. Installation of the subsea equipment is progressing, and the Amazon vessel is on site to complete the final stage of laying the pipelines in deep water. So we are confident that gas will be introduced into the facilities before the end of 2023. There will be a commissioning period before the final acceptance of the project to officially launch the commercial phase of exporting gas to international markets.

TAQA: When do you expect the final investment decision for the second phase of the GTA project to be signed?

For the second phase of the GTA project, it’s important to point out that the Mauritanian and Senegalese governments and the project partners (Bp, Kosmos Energy, SMH and Petrosen) selected a development concept for GTA phase 2 last February. Currently under evaluation, this concept will be progressed through pre-feasibility and feasibility studies (FEED) with a view to reaching a targeted final investment decision (FID) in the course of 2025.

Based on the GBS system, which is a gravity structure that performs both storage and liquefaction functions. It will also rely on the available capacity of the FPSO, to optimise capex. So we’re not going to invest in any new pre-treatment facilities, because we’re going to use the capacity offered by the FPSO. This platform will therefore perform the role of liquefaction in parallel, of course, with the FLNG in the first phase.

The current evaluation phase will enable us to determine the final production volume, which will be between 2.5 and 3 million tonnes per year. The process leading to FID can take an average of 36 months, depending on certain engineering, economic and financial parameters.

TAQA: How would you assess the local content achieved by national companies during the first phase of development of the GTA field?

It’s worth remembering that the first phase of the GTA project was carried out in fast-track mode, because the two States and the operators decided to speed up work on this phase, in order to establish a regional LNG hub. You will recall the record milestones that have been achieved in this phase; the signing of the ACI interstate cooperation agreement in February 2018, the IDF declaration in December 2018, the closing of the project’s financing and marketing in the following months…,

As a result, the project was implemented before the two countries (Mauritania and Senegal) were prepared to offer the necessary services to increase local content. In other words, there was no legal framework in place to maximise profits, and no local companies capable of providing services in line with the standards demanded by the oil companies. However, this phase did bring in some local content, valued at more than $200 million, both in terms of quarrying, which was carried out using the latest technology and standards. Major works were also carried out at the port of Nouakchott PANPA, with the dredging of quays 5 and 6 and the development of 20 hectares for rock storage. More than 100 national companies were also involved in the logistics work carried out in Mauritania for the project.

TAQA: What are the main actions you intend to take to develop local content?

We are currently drafting a framework law for the development of local content. This law will ensure the active participation of private players in the development of gas and oil projects. We are also going to set up a local content monitoring committee, which will be responsible for monitoring, evaluating and implementing projects aimed at improving the performance of local companies.

This body, which will be made up of all the ministries concerned, will monitor compliance with this law and the annual commitments made by foreign operators with regard to the development of local content; employment opportunities for the national workforce, training and skills transfer for Mauritanian managers and employees, as well as the participation of national companies in development work and the exploitation of natural resources.

TAQA: As the BirAllah IDF is scheduled for 2025, do you already have a forecast for the start of operations and the quantity of production expected?

As far as the BirAllah field is concerned, we have signed an exploration and production contract with BP and Kosmos Energy for a period of 30 months. During this period, we need to make progress on the pre-feasibility studies with a view to taking out an FID in 2025. The special feature of this project is the Government’s decision to test the feasibility of using the infrastructure of the port of N’Diago (onshore) to house the project facilities. We are currently carrying out technical studies to assess the work needed to upgrade the port and put a figure on the related costs, so that by October 2023 we will have a clear vision of the feasibility of carrying out the project in the N’Diago port area. This vision will enable us to move on to detailed studies of the project’s specific concept. If the studies confirm the technical aspects of installing the project at the port, we hope to speed up the work, bearing in mind that it will take 4 to 5 years to build this kind of development infrastructure. So if we manage to take over the IDF in 2025, we could complete the development work by 2030.

TAQA: You recently prepared a “Gas Master Plan” which includes around twenty projects in different areas. What are the main projects you plan to launch in the short term?

The Gas Master Plan is really the essential element that identifies the different options for monetising gas and also enables these options to be prioritised. Based on this plan, we have drawn up a roadmap to identify potential projects and implement them, according to a short, medium and long-term plan.

The priority projects are “gas to power”, because we need energy that is clean, reliable and affordable, and gas could meet these criteria. Then there’s gas to mines, which is very important right now. With the challenges of decarbonisation and carbon footprint management, all industries are adopting new standards and new processes that aim to minimise the impact of carbon. In this context, our integrated energy vision is to create synergy between the mining and gas sectors. Through combined projects, we intend to bring gas from the south to the mining centre in the north to transform it and reduce the use of other fossil fuels, which have a higher carbon footprint. So “gas to power” and “gas to mines” are the priority options. Similarly, ‘gas to transport’ is also a priority, and we plan to launch projects in this area, replacing the diesel used by SNIM’s locomotives, for example, with gas (LNG). We also intend to study a pilot project to substitute the petrol used by the artisanal fishing fleet with LNG. These priority projects will help to reduce greenhouse gas emissions and the country’s energy bill.

These are the short-term projects, and then of course the further we go the more gas resources we have available and other options will be realised. When we look at the beginning, it’s “gas to power”, but in the long term it’s the whole industrial spectrum enabled by the petrochemical industry that will be covered.

TAQA: Mauritania will be allocated a daily share of gas from production at the GTA field. How do you intend to exploit this share, given the absence of pipelines to deliver it to the local market?

The initial 35 million cubic feet per day of gas from the GTA field was originally intended to supply the dual 180 MW power plant in Nouakchott, so the idea was to build a pipeline to take the gas directly to the plant. Today, with progress on the BirAllah project and the potential need for gas in mining projects, and taking into account the need for a new combined cycle power plant by 2026, several options are currently being refined. We have launched a study for the construction of this gas pipeline, with the option of taking the gas from GTA either to N’Diago or Nouakchott or Nouadhibou or another landing point along the way. So the study will explore these different options to help us make a decision about this pipeline, its size and its arrival point. At the same time, we have also launched another study, for the construction of a 300 MW CCGT power station and its suitable location.

Probably the most optimal solution, taking into account the share from the first and second phases of GTA and the BirAllah project, is to build a large power plant at N’Diago, which can serve both the country’s electricity needs and also supply the demand from the projects that will be developed in this area.

TAQA: How would you assess the recent experience of oil exploitation in the Chinguetti field?

The Chinguetti field was a textbook case for Mauritania and even the sub-region. It enabled the country to acquire an oil culture and to capitalise on considerable experience in managing energy projects. The field was developed, brought on stream and abandoned in less than 15 years. In general, we don’t often get the chance to see all the stages a field goes through, i.e. appraisal, development, production and abandonment. Today, the abandonment operations are completely finished and have been carried out in accordance with the strictest standards in terms of environmental protection and well capping. The government demanded that the Norwegian standard NORSOK D10, one of the most stringent, be applied to the abandonment and rehabilitation plan for the site.

This abandonment experiment was very interesting and enabled us to learn lessons from our first experience of oil exploitation, lessons that were used to improve certain provisions of the Exploration Production Contracts.

TAQA: Are there any new developments regarding the exploitation of the BANDA natural gas field?

The BANDA field is still a live project despite multiple attempts that have not yet been successful, the last of which was with the company NFE, with whom we signed an MOU in 2021 and advanced towards the engineering concept with the aim of making a final investment decision in 2022, but unfortunately the project could not be completed.

However, BANDA is still on the agenda. We are continuing to explore with other partners the various options for its exploitation, in particular “gas to power”. Today we have a few options and we are in the process of evaluating them.

TAQA: What is the current state of oil and gas exploration in Mauritania’s coastal basin?

We currently have 3 oil companies operating in the coastal basin: Shell, on the C10 and C2, TotalEnergies on the C15 and Capricorn on the C7. These three operators have already carried out extensive seismic studies, through which they have identified some potential. I would say that Shell is quite advanced today, with an exploration well scheduled for this year in block C10. The rig has already been contracted and the spud should take place in the last quarter of this year. If this drilling proves positive, it will unlock a number of opportunities in blocks C10 and C2, and open up new prospects for the country, because it will test a new petroleum system in the Mauritanian coastal basin. TotalEnergies also has a drilling programme, following its decision to move into the 2nd exploration phase in the coming months.

There are three blocks in the coastal basin where exploration work is underway this year.

Our strategic vision for the sector is to accelerate exploration and development work in the coastal basin, as well as in the Taoudenni basin. As part of this, we have amended the Hydrocarbons Code for 2021 to introduce a special incentive scheme applicable to certain promotional zones, given their remoteness from infrastructure or their technological challenges. We believe that this is the right time to adopt a promotional approach that will attract new operators capable of highlighting potential and developing it rapidly in this context of energy transition.