Sterling agrees to farm-in terms for offshore Mauritania PSC
Sterling Energy has agreed to acquire a 40.5% interest from Tullow Oil in the production-sharing contract for block C-3 offshore Mauritania.
Tullow currently operates with a 90% stake, in partnership with Société Mauritanienne Des Hydrocarbures et Du Patrimoine Minier (SMH).
Subject to government approval for the transaction, Sterling will pay Tullow around $2.5 million in consideration and repayment of past costs.
The PSC, awarded in 2013, is in the first phase of the exploration period.
Block C-3 is a shallow-water block covering around 9,800 sq km (3,784 sq mi) in a barely explored area. Last year Tullow acquired 1,600 km (994 mi) of 2D seismic which will be processed during 2015. This represents the minimum work obligation for Phase 1, which expires next year.
Thereafter the joint venture may elect to enter into phases 2 and 3, each carrying a three-year term, with a minimum work obligation of 700 sq km (270 sq mi) of 3D seismic and one well (Phase 2) and one well (Phase 3).
Sterling and Tullow will carry SMH’s 10% interest proportionally during the exploration period.
Block C-3 gives Sterling an opening to a multi-play exploration setting and an emerging shelf margin play, the company says, as evidence last year by Cairn Energy’sSNE-1 oil discovery offshore Senegal to the south.