The significant oil and gas discoveries off the coast of Mauritania have enhanced the west African countrys appeal as a foreign investment destination
This was the message at a networking and information event hosted this week in London by the Mauritanian British Business Council (MBBC), with plans afoot for a trade mission this year.
Introducing the session, Ayana McIntosh-Lee, vice president - communications and external affairs, BP Mauritania and Senegal, described the commercial atmosphere in Nouakchott, the Mauritanian capital, as "buzzing".
After the introduction, attendees were briefed on Mauritania's economy, political situation and geography.
Iron ore extraction is currently the country's biggest industry, making up 46 per cent of total exports, but this may change if hydrocarbons are successfully exploited. As well as iron ore, Mauritania's other major extractive industry sectors are gold and copper. The Tasiast gold mine is in the second phase of an expansion project which will take production from 12,000 tons per day to 30,000 tons per day. But development of the Askat iron ore prospect is on hold until there is an upturn in commodity prices.
This is where hydrocarbons development could take over from iron ore.
BP, ExxonMobil, Petronas, Sonatrach, Total and Tullow are the major players in Mauritania's nascent hydrocarbons industry with big plans for gas production in particular to go online by 2021. The Chingetti field, which was operated by Petronas, was productive from 2006 until 2017 but the geology proved too challenging and the field is now in the process of being decommissioned.
However, the 15tcf Tortue field, discovered in 2015 by BP and Kosmos, is looking more promising with extensive seismic survey work being undertaken by multiple license-holders.
Total has three blocks and is looking to start drilling at the end of 2018 following encouraging seismic survey results. ExxonMobil is still undertaking seismic work with no immediate plans to drill. Meanwhile, onshore, Sonatrach, the Algerian national oil company, plans to drill its TA1 block either late 2018 or early 2019.
Gas rather than oil is the big focus of Mauritania's hydrocarbon prospectors with plans for a FPSO to be built by KBR, with McDermott and Baker Hughes winning contracts for front-end development. The plan is for an FPSO to be developed as well as a moored production site, and for gas to be used to meet Mauritania's energy needs. Investment opportunities along the whole value chain are expected to arise for businesses in Britain and beyond.
Fisheries make up Mauritania's second-biggest industry but this is being held back by a lack of processing facilities. Again, this could be an opportunity for foreign investors to make inroads in Mauritania. China has invested in fish meal plants but the government has ambitions for exporting fish to Asia and Europe. It is also hoped that oil and gas development will boost the fisheries industry, as was the case with parallel development in the North Sea, which is an area where Britain should be able to lend expertise as well as investment.
China is Mauritania's biggest export partner, with Spain, as Mauritania's closest European neighbour, another important international partner. Both countries are heavily involved in the Mauritanian construction industry as the country moves towards improved infrastructure and development, particularly in Nouakchott and Nouadhibou, the country's second city. The Chinese-built Friendship Port is an example of the infrastructure development which has been aided by foreign investment. In Nouakchott, major shipping companies, such as Maersk, are present at the port as well as international logistics operators and joint ventures with local partners.
The port of Nouadhibou, 450km north of the capital, is also important to the Mauritanian economy as it is a centre of deep sea fishing. This port is naturally sheltered and has been extended and upgraded to include an iron ore terminal, fishing port and commercial port. Crucially, it has been developed as free zone port to attract foreign investment and to become a hub for fish processing.
While Mauritania is 90 per cent desert, the agricultural industry focuses on meat and milk. However, as is the case with the fishing industry, more processing facilities and improved access to energy via the country's gas reserves are required for Mauritanian agriculture to move to the next level. Currently, Nouakchott imports all its meat as Mauritanian farmers export their produce to nearby countries, such as Senegal, Nigeria and Mali.
It is hoped that increased investment in Mauritania, along with hydrocarbons development, will help elevate it from its Least Developed Country status.
The MBBC presentation had a strong focus on investment in the education sector and the government is keen on this investment as part of its aim to continuously improve literacy rates which are around 50 per cent and ensure more students finish school. Primary school completion rates are at 70 percent while secondary school completion rates are at 33 per cent. Improved education rates are also seen as a way to reduce the risk of radicalisation and move more workers away from the informal economy, which currently makes up an estimated 12 per cent of Mauritania's total economy.
As well as education, the MBBC event concluded with an outline of other areas where British companies may be keen to invest. These included security, legal and accountancy services, financial consultancy, telecommunications, and renewable energy, particularly for the electrification of rural areas.
Tourism is another new industry for Mauritania and the focus at present is on adventure travel. However, with one company making plans to open a hotel school set around a working hotel, there is potential for growth in this area. The country's close relationship with Spain, in particular the Canary Islands, is expected to boost tourism, as long with the promotion of archaeological sites and increasingly improved infrastructure.
Inflation is controlled at 2.5 per cent and GDP is US$4.7bn (US$1,296 per capita). Twenty per cent of Mauritanians live on less than US$1.25 a day. The country is a parliamentary democracy with a directly elected president who can serve for a maximum of two five-year terms. Presidential elections are scheduled for November 2018 when the current president, Mohamed Ould Abdel Aziz, will have to stand down.
