Energy, Capital, & Power spoke with Tourad Abdel Baghi, General Manager at Societe Mauritanienne des Hydrocarbures (SMH), about the current gas projects and exploration prospects in Mauritania and the company’s commitment to advancing local content.
Could you give us an overview of SMH’s current activities?
First of all, thank you to ECP for helping promote MSGBC’s energy potential, specifically the Mauritania one.
As you know, Mauritania is endowed with natural resources that are of world class quantity and quality: gas, renewables (solar and wind), and minerals. These are the three pillars of an integrated and synergetic strategy adopted by the government, aiming to make the country a hub of the energy and steel industries for the benefit of the local, regional, African, and international markets.
In this context and to directly respond to your question, SMH is actively engaged in various projects, both in the exploration and development stages. In the exploration phase, we are actively working with partners Shell and Qatar Energy in Block C-10 for exploration, focusing on drilling this year at the promising Panna Cotta carbonate prospect that will hopefully unlock multi-billion barrel resource plays offshore Mauritania. Additionally, we are partnering with Total Energies for exploration in Block C-15 where good prospectivity has been identified.
In terms of development, Phase 1 of our GTA project, which is a unitized asset between Mauritania and Senegal, is progressing well, with nearly 90% execution, and the arrival in Mauritania waters of the FPSO Rosso is expected this July. Also, planning and concept studies for GTA Phase 2 are underway with the support of both governments of Mauritania and Senegal and in partnership with Petrosen, bp and Kosmos, with the aim of sanctioning the project in early 2025. Our common objective is to reach a production plateau of 10 mtpa of LNG as quickly as possible.
On the BirAllah which is a 50+ TCF gas field entirely in Mauritania waters, we are partnering with bp and Kosmos and have started the concept studies, leveraging the existing N’Diago Port. Actually, the N’Diago Port in southern Mauritania is meant to be utilized for the LNG plant and associated infrastructure, contributing significantly to the local content and gas supply to the domestic market.
Both BirAllah and GTA Phase 2 project timelines are aligned to reach a final investment decision (FID) by early 2025.
On the other side, we have the Banda gas field, discovered in 2023, that is fully appraised and has estimated resources of up to two TCF. Originally focused on a gas-to-power scheme, the development plan will now explore all the +20 options outlined in the National Gas Master Plan. Potential avenues may include small-scale LNG, compressed gas exports to Europe, gas utilization for fertilizers/chemicals, and gas for the mining industry. We are open to discussing this with any company that is interested in partnering with us for the development of this shallow and near shore gas field.
As the world has started transitioning to net zero, and like many of our partner companies, IOCs and NOCs, we have started working, with the support of the state, on reviewing the status and the vision of SMH to adapt them to the new environment and prepare the company for its new role in the green hydrogen and ammonia projects.
How does SMH intend to maximize the economic benefits of the recent gas development for both the national economy and local communities? What steps is SMH taking or planning to take to ensure the long-term maximization of these benefits?
SMH aims to maximize economic benefits from all our projects for the national economy and local communities. To achieve this, we work closely with our partners in order to prioritize local recruitment and skills development, as well as encourage the local supply of goods and services. Our JVs invest in identifying, coaching, and expanding the number of local entities that are or may potentially support E&P activity in the country. Supplier databases and portals are being developed and updated to facilitate access to procurement opportunities. Our JVs also provide and/or support training and education programs in collaboration with relevant institutions like the Ecole Supérieure Polytechnique in Nouakchott. Social and environmental responsibility initiatives are also implemented by the partnerships to directly benefit the projects’ nearby communities. These efforts and commitment extend to all our projects, showcasing our dedication to national development.
In the medium to long term, the country is in the process of adopting a local content strategy that will set clear guidelines and give better clarity on how to engage and support the socio-economic local content of the projects in the extractive industries in general.
Please provide specific examples of how SMH is committed to supporting local content in the region ?
As examples of such initiatives, we are funding and implementing, with our GTA partners, social responsibility programs, including medical centers and mobile clinics, clean water access, training/capacity building, education, fishing, and entrepreneurship projects for local communities in the region of N’Diago. It is also worth highlighting that we prioritize empowering women and investing in their self-sufficiency. The partnership, along with committees from the targeted communities, regularly assesses the impact of such programs and how they may be optimized and/or expanded to better suit the needs of such communities.
We have started recruiting individuals from the N’Diago region to support GTA activities and are discussing how to expand the scope of such recruitment. Regarding procurement for GTA project, we prioritize sourcing options exclusively from the region to maximize local involvement. Thus, we focus on disaggregating contracts to create more opportunities for local companies in Mauritania and Senegal while keeping an eye on a balanced split between the two countries. For contracts that need to be internationally bid, we work with the operator to encourage the potential winner, at the RFP stage, to bring in local partners in order to prepare them for the next bidding rounds for the same opportunity.
Similar approaches and programs have been and will be implemented by partnership of our other projects in the relevant zones.
What strategies is SMH employing to attract international or local investors for the development of your projects? Can you explain why it is important for SMH to participate in MSGBC Oil, Gas, & Power 2023?
Mauritania’s diversified opportunities and favorable legal framework, including sector-specific regulations and an investment code, provide an attractive environment for investment. SMH actively promotes investment opportunities and projects in the energy sector, including through participation in industry forums like MSGBC Oil, Gas, & Power 2023, which allows us to showcase exciting opportunities and engage with potential partners. To facilitate international collaboration, SMH has established a contractual framework based on internationally recognized models such as AIEN forms. Well renowned companies such as bp, Shell, Total, Kosmos, Qatar Energy, etc. have established a presence in Mauritania, and we continue to welcome interested companies in the energy sector.
Our participation in the MSGBC 2023 not only helps promote our energy potential and projects but also showcases an example of good cooperation that helped fast-track the joint development of GTA shared resources in a more synergetic approach that reduces costs and time and builds a common understanding of the subsurface of the basin.
Our hope is to see the Mauritania-Senegal and the SMH-PETROSEN models of cooperation and joint efforts largely shared across the region and the continent, so that they contribute to the economic integration aspired to by our leaders and people.