relief near as chinguetti partners prepare to ship

Relief near as Chinguetti partners prepare to ship oil
Email Print Normal font Large font By Barry FitzGerald
March 20, 2006
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GARIMPEIRO

THE Woodside-led joint venture operating in Mauritania's offshore waters is within a week or so of shipping the first cargo of oil from the Chinguetti project. Assuming all goes to plan, the shipment — also a first for Mauritania — will go a long way to easing investor concerns that the current spat between Woodside and the Mauritanian Government over the details of other offshore contracts of works is just that, a spat that will be resolved once the chest-beating on both sides is out of the way.

Max de Vietri, the Perth-based managing director of Baraka Petroleum, will not be dockside to wish the Greek oil tanker carrying Chinguetti's first oil bon voyage. But he might as well be.

As already well documented, the self-described extrovert with the Bathurst high school rock band pedigree is largely responsible for getting Australians involved in the hunt for oil offshore Mauritania in the first place, introducing Hardman Resources to the play. Hardman later brought in Shell and after it shot through, Woodside.

Fast-forward and de Vietri is now doing his own thing in Mauritania through Baraka, focusing on the Muslime nation's onshore oil and gas potential. The group's market capitalisation of $78 million (27¢ a share) tells you there are big expectations for the stock.

Stand by for some peripheral deals to be announced in the weeks ahead covering the sweep of the group's activities in West Africa. But the main event for Baraka remains the drilling of the Heron 1 exploration well in onshore coastal Block 20 in Mauritania.

Assuming no delays from weather — it can rain in the desert — Heron should be put to the test by the drill bit in August-September.

This is a prospect that Texaco was set to drill until Iraq's 1990 invasion of Kuwait convinced US oil groups they were best off at home for a while.

Baraka and its partner, the mighty Chinese oil outfit CNPC, have a consultant's report that ranks Heron as a 465-million-barrel oil target, with a recoverable potential of 132 million barrels (Baraka's share would be 35 per cent or 46 million barrels).

It is that sort of potential — and that is all it is until the drill bit proves otherwise — that will make Baraka a stock to watch in the months leading up to Heron 1 being spudded in, let alone drilled to total depth.