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Mauritania: PSC B Chinguetti Field

Location Nouakchott sub-basin (Northern MSGBC Basin)
Area Chinguetti Field 29 Km²
Sterling participation in Chinguetti Funding Agreement with SMH Economic interest for Approximately 8% of Chinguetti project
Sterling's Royalty over Premier's production

PSC B: Sliding scale royalty over 5.28% of Premier's share of the production of the Chinguetti Field

Sterling has economic interests in the Chinguetti field through a funding agreement with Societe Mauritanienne Des Hydrocarbures et du Patrimoine Minier (SMHPM), Mauritania's national oil company, and a royalty agreement with Premier Oil.

Gross production for the Chinguetti oil field during 2016 averaged 4,549 bopd (2015: 5,083 bopd). Average production net to the Group, from the Group's economic interests during 2016, was 279 bopd (2015: 310 bopd). Production was in steady decline throughout the year, reflecting the maturity of the field, but revenues benefited from a reduction in the Floating Production, Storage and Offtake ('FPSO') base day rate, and a field wide cost saving exercise implemented by the Operator.

The Group estimates that at the end of 2016, net entitlement 2P reserves stood at 73k barrels of oil equivalent ('boe') (2015: 173k barrels). 

The Chinguetti JV (Petronas, Tullow Oil, SMHPM, Premier, Kufpec) are converging on the optimal solution to the current end of field life challenges. Discussions continue to be held with the Government of Mauritania and relevant stakeholders on how best to both manage current operations and agree on a plan for a safe, cost-effective and technically robust decommissioning and abandonment phase. .