MAURITANIA is firming as an area of interest for Western Australia’s oil and gas industry with a number of locals keen for a slice of the action.
Recently-listed Baraka Petroleum is the latest to capitalise on the area with a new exploration deal with China National Petroleum Corporation International (CNPCI), one of China’s largest companies.
The agreement is a farm-out agreement, for Baraka’s wholly-owned coastal exploration region, known as Block 20, in Mauritania’s coastal basin.
Under the terms of the agreement, CNCPI will acquire a 65 per cent operating interest in Block 20, which covers approximately 10,700 square kilometres, by funding exploration costs up to $US8.6 million.
This deal follows Baraka’s debut on the Australian Stock Exchange in May, in which the company raised $17 million.
CNPCI has been looking to expand its presence in Mauritania and already holds a production-sharing contract over area surrounding Block 20, allowing it to achieve economies of scale.
It is expected that the agreement will receive approval from the Mauritanian Minister of Mines in early July.
The companies will exchange seismic data as part of the agreement.
Baraka chairman Shane Doherty said the deal with CNPCI is a major step for the West Perth-based company.
“The agreement is in line with our corporate strategy of preserving our capital and maximising our exploration expenditure by entering into joint venture and farm-out agreements,” Mr Doherty said.
Should exploration costs end up being more than expected, Baraka has a number of other interested parties.
“We also have additional capital we can call on, should we need it,” Mr Doherty said.
He said the region would experience significant interest in the coming years, thanks to major discoveries made by international petroleum players.
The area has become a haven for WA companies Woodside Petroleum, which has an interest in the Taoudeni Basin, another of Baraka’s projects, and AIM-listed Hardman Resources, which is developing the $US600 million Chinguetti with joint venture partner Woodside.
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