Oil and gas companies failing to capitalise on MSGBC Basin’s huge gas discoveries

Two major gas discoveries have been made in Western Africa’s MSGBC Basin.* However, oil and gas companies so far have failed to capitalise on these significant resources and it could be quite some time until an intention to develop them is seen, reports GlobalData.

One reason for the lack of movement on the MSGBC Basin could be the final investment decision (FID) that was made on the cross-border Tortue/Ahmeyim LNG development in 2018, followed by the Senegalese development of the Sangomar oil field in early 2020, suggests the market analyst. These developments will bring the two countries into the world of oil and gas exporting and further world class discovered resources indicate major upside still to be captured in both countries, it says.

Conor Ward, Oil and Gas Analyst, GlobalData, notes: ‘There is significant potential in both Senegal and Mauritania, and so far, cautious investment has been made to kick-start smaller scale developments in both countries. In comparison, while there have been far larger discoveries in BirAllah and Yakaar-Teranga, little progress has been made towards commercial development of these fields.’

The world-class Yakaar-Teranga and BirAllah area discoveries hold some 10–25tn cf and 12–60tn cf of gas initially in place respectively, enough to support their own LNG developments.

Ward adds: ‘This significant resource base should be attracting far more interest than it currently seems to be. Despite mentions of potential development plans, little progress has been made by the participants towards FID. This slow movement could in part be due to the market impacts caused by the COVID-19 pandemic and the vast amount of capital that would be required to unlock these resources. At a time when companies are increasingly more careful with their budgets, and in an area where they have limited experience, it is likely that the participants will wait and see the success of Tortue/Ahmeyim before making a concrete decision on Yakaar-Teranga and BirAllah.’

*The MSGBC Basin comprises the Mauritania, Senegal, Gambia, Guinea-Bissau and Guinea-Conakry basins of western Africa.

Figure 1: Recoverable resources versus capex to first production planned and announced fields in Senegal and Mauritania
Source: GlobalData