The Prime Minister has shed some light on Exclusive Economic Zone of Mauritius and petroleum exploration in these areas in his reply to the Parliamentary question of Arvin Boolell, First Member for Belle Rose and Quatre Bornes.
The Exclusive Economic Zone (EEZ) of Mauritius, which extends over an area of approximately 2.3 million km2 covering the regions of Mauritius, Rodrigues, Agalega, Tromelin islands, the Cargados Carajos and the Chagos Archipelago, is our largest natural asset. As its potential for still untapped natural resources may be significantly huge, the Government has continuously been focusing on a prudent, responsible, and sustainable development of such a vast maritime economic zone.
The Offshore Petroleum Act 2021 opens new avenues and opportunities for Mauritius as we seek to sustainably develop our Exclusive Economic Zone. It provides more clarity about the processes involved in the regulation of offshore petroleum activities which include the prospection for, the exploration and the production of petroleum. The Act provides for the Department for Continental Shelf, Maritime Zones Administration and Exploration, which falls under the aegis of my Office, to be the regulatory body for petroleum activities in the maritime zones of Mauritius and which shall, inter alia, be responsible for the following:
(i) to regulate, monitor and oversee petroleum activities;
(ii) to issue prospecting permits, exploration licences, retention licences and production licences;
(iii) to negotiate, on behalf of the Government, prospecting agreements and petroleum agreements;
(iv) to facilitate the conduct of petroleum activities;
(v) to develop strategies and policies to minimize and manage the impacts of petroleum activities in the marine environment;
(vi) to advise in the formulation, planning and management of policies in relation to petroleum activities; and
(vii) to do such other things as may be necessary for the proper conduct of petroleum activities.
The Offshore Petroleum Act provides a new regulatory régime and is underpinned by the following principles:
(i) first, to encourage private sector participation in the exploration for offshore petroleum through the establishment of a modern and stable regulatory environment providing for the transparent and even-handed treatment of investors, and access to and security of tenure over an area of petroleum potential;
(ii) second, to establish streamlined and effective institutional arrangements for the management of offshore petroleum activities; and
(iii) third, to apply the principles of predictability, transparency, and accountability for the administration of offshore petroleum activities.
The centrepiece of this new régime is the establishment of a concession-based regulatory system which is commonly applied in both frontier jurisdictions, like ours, and mature jurisdictions. Under such system, rights to engage in the exploration for offshore petroleum would be granted by the Government to investors seeking to carry out petroleum activity in defined areas or blocks during the agreed period.
The four areas selected based on their geological formation and thus the potential for hydrocarbon resources were as follows:
(i) an area of approximately 18,000 km2 in the region of Agalega;
(ii) an area of approximately 108,000 km2 in the region of the Northern Mascarene Basin;
(ii) an area of approximately 20,000 km2 in the region of the Northern Saya de Malha; and
(iv) an area of approximately 228,000 km2 in the region of Nazareth and Cargados and Carajos Banks.
Eight companies had submitted their Expressions of Interest by June 2016. The bids were evaluated and in October 2017, the eight companies were invited to submit their Requests for Proposal. In response to that exercise, only three companies submitted their bids. The bids were assessed and CGG Services (UK) Ltd obtained the highest marks in terms of compliance with the technical, environmental, and financial criteria.
In January 2020, the agreement for the conduct of a geoscientific survey was signed between the Government and CGG Services SAS. The agreement provides CGG Services SAS with 18 months of ‘Marketing Period’ to secure pre-commitment underwriting, that is pre-funding, from potential oil and gas companies. However, CGG Services SAS has requested that the ‘Marketing Period’ be extended due to the following reasons:
(i) the COVID-19 pandemic has had a significant impact on global industry, creating an oversupply of hydrocarbons and consequently reducing oil and gas market prices. As a result, international oil companies have had difficulties to raise investment capital for exploration; and
(ii) there has been a significant reduction in exploration spending in frontier areas.
Following an improvement in the situation regarding the COVID-19 pandemic, CGG Services SAS is pursuing its promotional activities in order to secure pre-commitment underwriting from potential oil and gas companies. Earlier this month, CGG Services SAS were at the Africa Oil Week in Cape Town, South Africa, which is the premier event for Oil and Gas in Africa, as part of its marketing and promotional activities.
Once CGG Services SAS has secured pre-commitment underwriting from oil and gas companies, it will then submit a request for a prospecting permit to the Department for Continental Shelf, Maritime Zones Administration and Exploration, in line with the provisions of the new Offshore Petroleum Act.
