Oil Exploration: Maurice Advance with Caution in the Search of Black Gold

8 years, 7 months ago - November 10, 2013
The discovery of oil in our waters would change dramatically the face of the Mauritian economy. If the Seychelles, which is our partner on this project has already started the machinery, however, Maurice proceeded with caution.

Is there oil in the bottom of the continental shelf co-managed by the Mauritius-Seychelles tandem? If this is the case, the benefits will be substantial for both countries. As also pointed out by the Minister of Foreign Affairs Arvin Boolell, we will make a giant step forward as a service economy becoming a major supplier of petroleum products in the region. In 2012, Mauritius has imported petroleum products worth Rs 34.5 billion. This represents 21.44% of the total import notes amounting to Rs 160.9 billion.

Oil exploration is expected to develop in parallel with the ocean industry whose potential can be fully exploited in our exclusive economic zone (EEZ) of almost 2 million square kilometers. In July, as part of the National Dialogue on Ocean Economy, Prime Min-ister, Dr. Navin Ramgoolam, relaunched the debate on the ocean industry, one of whose components is oil exploration.

Two treaties ratified

Since then, a roadmap on the development of ocean economy was unveiled. Several activities are identified as part of this strategy, the exploration of the seabed in search of oil and minerals.

The exploration will be done in the area of  the continental shelf of the Sea Mascarene managed jointly Mauritius and Seychelles. This area is spread over an area of 396,000 square kilometers. To establish co-management of the continental shelf, the two countries signed two treaties. The first is to define the territory of the continental shelf. The second is to establish structures and a common legal framework between the two countries to govern the terms of this strategy including oil exploration and, among others, the issue of concession operators.

Mauritius and Seychelles have each established a Three third system . In Mauritius, the top of this structure, there is the Ministerial Council and a Joint Commission and Designated Council . In Mauritius, the Ministerial Council is the responsibility of the Minister of Foreign Affairs, Regional Integration and International Trade. As the Joint Commission , it is a unit known as the Ocean Matters named, under the leadership of Prime Minister's Office. The Joint Commission is the Member Secretary of the Cabinet, S. Seeballuck, the Solicitor General, D. Dabee, Ambassador J. Koonjul and Riza Badal, former director of the Mauritius Oceanography Institute and currently Head of Ocean Matters .

The Three third system of the two countries focused on several issues, including the development of a Joint Fiscal and Taxation Code and a draft Petroleum Bill, a 200-page document.

To the Joint Fiscal and Taxation Code is to harmonize the tax system between the two countries. If in terms of the regulations, we have already prepared the ground, however, Mauritius has not yet issued a tender for exploration of black gold.

The popularity of Seychelles

Meanwhile, the Seychelles has taken a step ahead of Mauritius. The Seychelles government has already allocated exploration licenses to two international companies: Afren Plc and WHL Energy Australia. This is especially the geological aspect that led Seychelles to engage in oil exploration. " The Seychelles are made ??up mainly of granite and have a continental origin, able to conceal hydrocarbons. Mauritius is a volcanic island against , "says Riza Badal.

Yusuf Ramjanally, Second Secretary at the Ministry of Foreign Affairs, advance any reason for the popularity of Seychelles to explore for petroleum products. " The Seychelles archipelago is limited in terms of area (land mass). It is therefore logical that he turned to the opportunities it gives the ocean , "he argues. In the case of Mauritius, the country is also limited in terms of size, but we have more focus on onshore developments.

And Riza Badal of renchérir Maurice will have to embark on a series of studies to determine the presence or absence of oil in our territorial area.

Still, he has the interest of investors through Mauritius for the purposes of oil exploration there. " We had no difficulty in attracting foreign companies. For the exploration of petroleum products in our region, we have received requests from foreign and local companies. There is a great interest on the part of these companies , "said Riza Badal.

For his part, Yusuf Ramjanally, Second Secretary at the Ministry of Foreign Affairs, said Maurice prefer advance conservatively on this issue. " We are trying to adopt a more cautious approach. In other words, we stack the bricks one by one in order to develop this new industry in a professional manner taking into consideration the aspect of sustainable development , "he said. And insist that we must find a balance between exploration, exploitation of petroleum products and the sustainable development of this industry.

An opinion shared by Riza Badal. " For the exploration and exploitation of petroleum products, the environmental aspect remains an issue more seriously , "he says.

Mauritius and Seychelles have also established an Environmental Code of Practice , seeking the expertise of the Commonwealth. " Studies have been undertaken for the 'mapping' of the seabed. This exercise will identify the most at-risk areas need more attention , "says Riza Badal.

The Concession Right Agreement privileged

The authorities seem to have made their choice on the type of agreement that will offer operators interested in the exploration of petroleum products. " Globally, there are two types of agreements: the 'Production Sharing Agreement' and 'Concession Right Agreement'. The 'Concession Right Agreement' is better our situation , "said Riza Badal. This agreement will include defining the time required for an operation of oil exploration.

The question is whether the government will pass and not go ahead with the proposed oil exploration.

Seismic studies to Rs 300 million

Oil exploration involves studies and significant investments. Research is expensive, especially seismic campaigns that include two to three weeks. These cost between Rs 200 million and Rs 300 million. To conduct such studies, bilateral agreements must first be ratified with partner countries. "To develop this new area, we need expertise, new technologies, but also funding. It is imperative to recognize that we can not depend on our own resources, "said Yusuf Ramjanally.

When the Russians and Americans combed our seabed

Oil exploration in our land area is not a new initiative. Thus, there is 40 years, Russians have conducted studies to determine the 'living' and 'non-living resources' in our seabed. In 1975, the U.S. Texaco embarked on the exploration of our seas. But they ended after two drill testing. Texaco has not dug in the volcanic area. In 2002, further exploration took place.

Jumped to the Mauritian economy if ...

Possible discovery of black gold in our marine waters of Mauritius will benefit economically. " This discovery will enable Mauritius to become more independent and will forever change or revitalize the national economy. If the country produces itself of petroleum products, the balance of payments will be improved , "says Ranjan Kumar Mohapatra, Managing Director of IndianOil (Mauritius).


Text by Business Magazine

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