Woodside goes ahead in Africa
AUSTRALIA's Woodside Petroleum is to go ahead with the development of the Chinguetti oil field off the coast of Mauritania with British partners BG Group and Premier Oil.
The Chinguetti project is the cornerstone of Woodside's offshore expansion programme.
The field, about 60 miles west of the Mauritanian capital Nouakchott, was discovered in 2001. It has proven and probable reserves of about 120m barrels of oil.
'It will be the first production operated by Woodside outside Australia and will be a major contributor to our production and revenue stream,' Woodside's Africa Business Unit Director Ian Jackson said in a statement.
Capital investment for the first stage of the project will be about $600m (£327m) with the field expected to be producing about 75,000 barrels a day by 2006.
At that rate, Chinguetti has an eight-year life and could generate 11% of the company's output as Australian fields decline. The company operates the giant North West Shelf gas project off the coast of Western Australia.
Woodside, which is 34%-owned by Royal Dutch/Shell Group, aims almost to double annual production to about 100 million barrels by 2007 and could approve as many as seven new projects this year.
The Chinguetti venture is 53.9% owned by Woodside with fellow Australian Hardman Resources holding 21.6%. British firms BG Group and Premier hold 11.6% and 9.2% respectively while Roc Oil holds 3.7%.
The long-awaited decision-on the Chinguetti field should also speed up the development of the the Tiof field in the same emerging Mauritanian province.
Keith Spence, Woodside's chief operating officer, said Tiof could become the company's second production hub off the West African coast by 2008.
'If it's big, and we think that it probably is, then there is the opportunity to do things like accelerate Tiof through an early production system,' Spence was reported as saying. 'We're going flat out on that.'
Deutsche Bank estimates that Tiof contains between 200m and 700m barrels of oil, five times as big as Chinguetti. Spence said it could cost up to £800m to develop as a stand-alone project. The joint venture is also test drilling at nearby Poune well.
Premier Oil chief Charles Jamieson says the company is 'delighted that the Chinguetti well has been a success'.
The field is part an aggressive exploration and appraisal programme this year.
Last week the company announced it had bought a stake in a potential oilfield in the Gulf of Suez Basin in Egypt with drilling to begin in the fourth quarter 2004.
