Tullow Oil and partner Sterling Energy have decided to exit Block C-10 offshore Mauritania after determining the block’s prospects did not commercially justify a third phase of exploration.
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| Block C-10. Source: Sterling |
The joint venture submitted a notice not to enter the third renewal period for the block, which had a minimum work obligation of two wells. The companies will have to pay the Mauritanian government a $7.5 million gross penalty payment -- $1.125 million net to Sterling -- for not meeting this minimum required work, Sterling reported in a 2 November press statement.
The production sharing contract for the block was awarded in 2011 and set to expire on 29 November. The second phase of the production sharing agreement currently is underway, with a minimum work requirement of one exploration well.
Block C-10 covers an area of approximately 10,725sq km in water depths of 50m to 2,400m with full legacy 3D seismic coverage.
Sterling entered the block in June 2015 by acquiring a 13.5% stake. At that time, Tullow had matured a drill ready Neocomian carbonate prospect in a water depth of approximately 100m. The joint venture originally anticipated that an exploration well to test this prospect would be drilled in 2017, but this will not happen due to the exit.
Tullow has been negotiating with the nation’s government to secure a one-year extension through a new 3D seismic survey. However, the government has said that this work obligation proposal doesn’t warrant an extension to the second term.
“Our entry into the C-10 block, was prefaced on extensive subsurface work demonstrating potential for both untested inboard Neocomian carbonate and outboard Cenomanian to Albian plays, the latter proven by Kosmos Energy. However, subsequent technical and economic modelling has not matured a viable hub scale opportunity on block,” Eskil Jersing, Sterling’s chief executive officer stated.
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