Offshore gas discoveries help put Mauritania on the maphttps://en.majalla.com/node/319826/business-economy/offshore-gas-discoveries-help-put-mauritania-map
Offshore gas discoveries help put Mauritania on the map
Hydrocarbons, minerals, and uranium are all attracting interest in an African democracy with an Atlantic coast, a lack of terrorism, and a habit of making friends. Is this Mauritania’s moment?
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Oil and gas discoveries in Mauritania are transforming a forgotten state in the northwest of Africa into a regional player attracting the attention of the West.
Offshore gas discoveries help put Mauritania on the map
Oil and gas discoveries in Mauritania are transforming a forgotten state in the northwest of Africa into a regional player attracting the attention of the West. Neighbouring Arab countries have generally welcomed the development, although some will see this as competition. For Mauritania, with its Atlantic western coast and Saharan interior, life has rarely felt more stable or optimistic.
Bordered by the Arab Maghreb to the north and the landlocked Sahel to the east, this is not a wealthy region, so the carbon finds—confirmed by big oil majors—are a boon to both the people and the treasury. Production pilot schemes are already underway, and the companies have said they could be ready to begin exporting before the end of this year. Not bad for a country best known for its fishing, minerals, camel trade, and jewellery.
President Mohamed Ould Ghazouani is seeking a second term at the end of this month, and all signs suggest that he will get it. Having improved security, the economy, and living standards for Mauritania’s 4.7 million people, he has cause for optimism.
Seizing the opportunity
Since gaining independence 64 years ago, the country’s history has been one of poverty, military coups, insecurity, and under-development, but thanks to geology, technology, and political wherewithal, this could be Mauritania’s moment.
With proven gas reserves of 80 trillion cubic feet (tcf) and an estimated annual output of 10 million tonnes of Liquefied Natural Gas (LNG), the BirAllah Conventional Gas Field, off the coast of Mauritania, could transform the country’s energy landscape. Its development is now being fast-tracked.
With proven gas reserves of 80 trillion cubic feet, the BirAllah gas field, off the coast of Mauritania, could transform the country's energy landscape.
Meanwhile, straddling the maritime border between Senegal and Mauritania, Phase 1 of the Greater Tortue Ahmeyim (GTA) gasfield is set to start commercial production later this year. It is estimated to contain up to 30tcf of gas that will be exported as LNG.
Elisabeth Gillbard, a geologist for energy data and analytics company TGS, thinks there could be more. Speaking to African Business, she said: "Offshore Mauritania alone, there have been 11 major discoveries, and almost every well has oil or gas shows within them. It's a very active source system."
The discoveries—and Western interest in them—are translating into changes. Emblematic of these are plans to open a science university in the capital, Nouakchott. Politically, countries are waking up to Mauritania's untapped potential. In February, Spain said it wanted to work with Mauritania on green hydrogen. In March, US Secretary of State Antony Blinken congratulated Ghazouani on his election as President of the African Union for 2024 and said the US wanted to develop ties.
G7 and GTA
Earlier this month, Ghazouani became the first Mauritanian leader to attend the annual Group of Seven (G7) summit, which was held in Italy. He was there in an official observer capacity alongside Algerian President Abdelmadjid Tebboune, Tunisia's Kais Saied, and Kenyan President William Ruto.
Saied, who makes very few visits abroad, made an exception for Mauritania in February. As the G7 was underway, BP (formerly British Petroleum) announced a landmark moment in its development of the GTA field: the safe arrival from China of the key component, the floating production storage and offloading (FPSO) vessel.
That has now been connected to pipelines to transport gas from offshore wells to storage terminals before being loaded onto specialised gas tankers. Revenue from the GTA field is expected to increase national and per capita income in Mauritania and Senegal, creating job opportunities for the young and helping to tackle the high unemployment figures in each country.
A man leaves a butcher shop as a taxi drives by in the market of Chinguetti, on March 17, 2023.
Growth and investment
In a land of coups, both countries remain democracies. This enhances investor confidence. In 2022, investment in Senegal reached $2.58bn and $1.14bn in Mauritania, according to the UN Conference on Trade and Development.
Countries such as the UK, France, Germany, and Spain see the likes of Mauritania and Senegal as potential sources of renewable energy to help offset the loss of Russian gas and contribute to the green energy transition and the goal of carbon neutrality by 2050.
The Atlantic coastline allows both wind and solar farms to be built in a region where temperatures can reach 50 degrees Celsius.
The International Monetary Fund (IMF) expects Mauritania's economy to grow at an average rate of 4.9% between 2024-26, rising to 14.3% after 2025 as oil and gas fields come onstream. Natural gas exports alone will account for 11.6% of total exports. This is about 2.3 million tonnes annually during the first phase. Production would then double to 5 million tonnes annually in 2027, reaching 10 million tonnes by 2030.
The BirAllah Conventional Gas Field, with its 80tcf reserves, will then strengthen Mauritania's position as an emerging gas power in the coming years. At a depth of 2,850 metres below sea level, GTA is 120km from the coast. It will have the deepest subsea infrastructure in Africa. BP, which owns a 56% stake in it, will operate the field on behalf of several partner firms.
According to the IMF, Senegal's economy is expected to grow by 7% this year and 10% next, assuming revenues from 100,000 barrels of oil per day and 90 million cubic feet of gas produced daily from the Sangomar field. Production from other fields such as Banda (not far from the capital Nouakchott) or Pelican will each tap reserves estimated at 1.2tcf. Banda was discovered in 2002. Its development is being led by an Egyptian consortium and an Emirati company.
Not just hydrocarbons
Oil and gas are not the only cards that Mauritania can play. The Australian company Aura Energy says Mauritania is about to join the club of uranium-producing nations, making it the second largest in West Africa after Niger. This would be through the exploitation of the Tiris uranium mine, whose known reserves are thought to have increased by 55%. It has a current market value of $2.25bn and can be developed over 17 years.
A Nigerien Soldier walks outside France's state-owned nuclear giant Areva's uranium mine on September 26, 2010 in Arlit, Niger.
This promises significant wealth for such a sparsely populated country and has the potential to transform the economy. Furthermore, Africa has significant reserves of in-demand minerals such as iron (only Liberia and South Africa have more, according to the US ratings agency Fitch).
According to the National Company for Industry and Mines (SNIM), Mauritania exported 14 million tonnes of iron ore in 2023, which accounts for 22% of the state's general budget. In addition to its uranium, Mauritania is rich in phosphates, manganese, zinc, copper, gold, silver, and other minerals needed for electric vehicle (EV) batteries. Chinese manufacturers are showing a keen interest.
Securing African minerals lets Chinese EV manufacturers to lower production costs compared to European industries, according to Carlos Tavares, boss of automaker Stellantis Group. G7 interest may also relate to the need to secure raw materials at preferential prices, given China's increasing dominance in the EV market.
Hopes and challenges
The World Bank thinks Mauritania's prospects are bright. It expects economic growth to hit 5%, with inflation lowering to 2.5% this year. Its balance of payments is likely to improve by 6.7% between 2025-26, driven by gas revenues, which will reduce the budget deficit to 0.2% and cut debt to less than 47% of GDP.
This is good news for those hoping to tackle poverty and unemployment, improve health and social care, and raise the quality of education, which currently stands at 4.2 years of schooling per child, one of the lowest in the region.
If revenues from Mauritania's natural riches increase and the money is not siphoned off by corrupt elites but used for development, then health, education, poverty, social care, and employment will all be helped.
Illegal immigration from Mauritania to Europe has vexed officials in Brussels for years, with economic migrants braving the Atlantic to reach the Spanish Canary Islands. Around 6,000 have died making the crossing so far. In March, Europe offered $210mn to Mauritania to help stem the tide of migrants. Washington also supports the Mauritanian government, providing advanced equipment and drones to combat extremism.
Terrorist groups are known to infiltrate from nearby landlocked Sahel countries, where Russian paramilitaries have filled the void following the withdrawal of US and French military forces from Niger and Mali.
The IMF expects Mauritania's economy to grow 4.9% between 2024-26, rising to 14.3% after 2025 as oil and gas fields come onstream.
An Atlantic alliance
Politically and economically, North Africa's two heavy hitters are neighbours and rivals: Algeria and Morocco. They share a long and somewhat insecure border, and both have recently looked south for friends and partners.
Mauritania is keen to keep both onside, but sharing an Atlantic coastline with Morocco that is now known to host reserves of hydrocarbons may suggest future cooperation. Morocco has hailed it as a promising development for the region, but of more immediate interest in Rabat is the construction—through Mauritanian waters—of an offshore 5,600km gas pipeline linking Nigerian fields to Morocco's Mediterranean coast, from where it would then be piped north to European customers.
In contrast, the discovery of gas on the Senegalese-Mauritanian border does not serve Algeria's interests, given that this would then compete with its own gas. Nigeria, meanwhile, is enthused, with talk of establishing an electricity market in West Africa that could form the nucleus of an economic bloc that looks towards Latin America as a potential market.
For Mauritania, the path to prosperity is being forged through the fields of offshore gas and the political alliances and foreign investment this brings. Yet, as with the gas itself, this opportunity should be handled with care.
