Tullow Oil has agreed new production sharing contract (PSC) arrangements with the government of Mauritania and its joint venture partners, allowing it to progress exploration in the country.
Tullow said the deal would enable it to progress the appraisal and development of existing discoveries and pursue exploration in a new contract area covering 10,725 square kilometres, with Tullow as operator.
The new arrangements result in the exploration areas of the PSCs previously known as PSC-Area A and PSC-Area B being replaced by a new, single Exploration PSC called C-10. Tullow will operate this new PSC with a 59.15 per cent interest.
The existing Banda, Tevet and Tiof discoveries have been ring-fenced under the original PSC terms and extensions of up to 18 months have been granted to allow appraisal and development activities to be completed. Petronas will continue to operate Chinguetti Field on the basis of the original equities, the company said.
Tullow will now work closely with the government of Mauritania and its joint venture partners on the near-term commercialisation of the existing discoveries and the initiation of a high-impact exploration programme. Tullow said that the development of the Banda gas and Banda oil rim discoveries will be prioritised, with the results of initial development studies to be presented to the government in early 2012.
The exploration programme is expected to include a minimum of two wells over the next three years.
Commenting, chief executive Aidan Heavey said: "We are delighted to have agreed new PSC arrangements offshore Mauritania. As operator of the Banda, Tiof and Tevet discoveries, we will now work closely with the government of Mauritania to commercialise these important hydrocarbon resources.
“We have also identified significant new exploration potential in this acreage and look forward to applying the knowledge and expertise of similar geological plays gained from our successful Equatorial Atlantic exploration campaigns in West Africa and South America.
“While we have worked in Mauritania for many years, this is essentially an exciting new beginning for Tullow as we increase our equity and take on the operatorship in these highly valuable and prospective licences."
London-based Tullow has interests in over 90 exploration and production licences across 22 countries, with a focus on Africa, Europe, South Asia and South America.
