Dispute hits Mauritania oil venture Nigel Wilson, Energy writer 04feb06 AUSTRALIA'S biggest investment in Africa is under a cloud after the Mauritanian Government disputed its predecessor's arrangements with Australian companies Woodside, Hardman Resources and Roc Oil, covering oil and gas deposits worth billions of dollars.
Woodside told the stock exchange yesterday it had been advised by the Mauritanian Government that it disputed amendments to four offshore production-sharing contracts operated by the company's wholly-owned subsidiary, Woodside Mauritania Pty Ltd. The Australian Government has been informed and has requested an update on the Mauritanian situation from the embassy in Paris, which looks after Australia's diplomatic interests in the west African country. Woodside said the dispute did not affect the $US705 million ($935 million) Chinguetti oil field development, which was on schedule to begin producing later this month. "It is business as usual," a Woodside spokesman said, maintaining the company would continue with plans to conduct a new exploration program over parts of the areas in dispute, beginning in the next three months. Woodside and its partners have spent hundreds of millions of dollars in Mauritania, which is regarded as one of the most exciting emerging petroleum provinces in the world. The dispute follows a coup in Mauritania last August, which resulted in the overthrow of then president Maaouiya Ould Sid'Ahmed Taya. At the time, Woodside played down the political risk to its investment under the new military regime. In December the new Government reportedly arrested the former regime's petroleum and energy minister, Zaydane Ould Hmaidah, on allegations of accepting bribes from foreign oil companies in exchange for waiving taxes and charges. At the the time it was reported the companies involved came from Australia, Britain, Canada, Germany and Russia. The areas in dispute cover production permits outside the Chinguetti development but are understood to cover gas and oil reservoirs discovered at Tevet, Banda and Tiof about 90km offshore from the Mauritanian capital Nouakchott. Preliminary estimates suggest these reserves contain oil and gas worth billions of dollars. The original permits over the areas were granted in 1998, before oil was discovered. They were amended by the Mauritanian Government following negotiations between the companies holding the permits and the Ministry of Energy and Petroleum and approved by the Mauritanian Parliament, before becoming law in 2005. Woodside said yesterday it was confident the disputed amendments were proper, valid and binding. The company was encouraged that the Mauritanian Government had said it would honour the dispute resolution mechanism agreed with the previous administration, which could lead to the dispute being arbitrated by an independent European court. Woodside's joint venture partners in the four production-sharing contract areas include Australian companies Hardman Resources and Roc Oil as well as British companies BG Group, Premier Oil, Dana Petroleum and Fusion Oil and Gas. A Department of Foreign Affairs and Trade spokesman said the Australian Government was aware of the dispute, which appeared to cover legal and commercial matters. While it had sought an update from the Australian Embassy in Paris, it was unlikely that Australia's diplomatic relations in the region would be affected. Woodside has a 47.83 per cent stake in Chinguetti, Hardman Resources holds 19.01 per cent and Roc Oil 3.25 per cent, while BG Group has 10.23 per cent and Premier Oil 8.12 per cent, and Mauritania has about 12 per cent. _______________________________________________ M-net mailing list [email protected] http://mauritanie-net.com/mailman/listinfo/m-net_mauritanie-net.com
