- The first shipments of Mauritanian oil have reached the Chinese market, and although rather low priced, substantial state funds have been generated. The Chinese used the occasion to sign further oil exploration deals with Mauritania, even onshore. Four new oil perforations are to be drilled already in July.
The first Mauritanian petroleum shipment has been transported and sold to China. The price of this oil however turned out rather low - some 4 or 5 US dollars below the Brent quality - given its elevated sulphur concentration. Two more shipments of the same volume - 1,900 million barrels a day - were due to have been sold in the beginning of April for the same country on behalf of the company Sinopect.
60 percent of the revenues generated by these exports are destined to finance transports alone, whereas the remaining 40 percent are divided between the Mauritanian state (35%) and the members of the oil consortium that operates the well (5%).
But the Chinese are not only the main buyers of Mauritanian oil; they are also present among the associates behind the much of the ongoing oil exploration on Mauritanian territory in the capacity of the National Petroleum Company of China (CNPC).
The Mauritanian government is bound by four oil distribution agreements with the CNPC, regarding the production from several production fields. Four of the blocks are onshore, including two in Taoudenni and two at the level of the coastal basin.
The Chinese state company already has carried out seismic explorations on the ground of the last two blocks. The analyses of these seismic data obviously have shown favourable results, resulting in a decision to complete further stages of the explorations. Consequently, the CNPC in July this year will start the drilling of two wells.
The Chinese explorations are made on a prospect with a long history. The Chinese state company recovered the block from the Mauritanian-Australian company Baraka Petroleum, which ceded 65 percent of its shares to CNPC at a cost of US$ 8.6 million. This same prospect zone had already been given up by the American company Texaco at the time of the Gulf War, in 1991.
While the Chinese are increasingly getting involved in Mauritania's oil reserves, the country's main oil production however still is offshore, concentrated on the Chinguetti field. Chinguetti was discovered in 2001 and has been producing oil since early this year. Blocks on Chinguetti are operated by Woodside (Australia) and Dana (UK).
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