The frontier explorer became an oil producer when the Chinguetti field came onstream last month.
Hardman has a 19% stake in the Woodside-operated field, which is already producing more than 75,000 barrels of oil a day.
Now Hardman is pushing for the joint venture to begin developing the 267 million bbls offshore Mauritanian Tiof field north of Chinguetti, which lies in one of the production-sharing contracts under dispute with the Mauritanian Government.
The project partners expect to decide whether and how to develop the complex Tiof reservoir – by the end of June.
Hardman managing director Simon Potter said Tiof would be a phased development because of its complexity.
He said he wanted the JV to commit to a production development program rather than undertaking more appraisal wells. He advocated beginning production from a clearly favourable location and acquiring more data as the project proceeded.
“Tiof is progressing well, though I would prefer a faster pace,” Potter said.
“My expectation is that Tiof will proceed on a phased development basis where we will place a separate production facility into the field with a development comprising either two or four producer-injector couplets producing to a separate facility.
“Such a development is then expandable to incorporate further wells once we have dynamic reservoir data from the field. This approach has merits in ensuring cash flow at the earliest opportunity whilst constraining exposure.”
Hardman’s 2006 Mauritanian exploration program – which involves work in two JVs – is expected to restart in June or July, according to Potter.
“Hardman’s 2006 Mauritanian exploration program will run continuously through the second half of the year once the new rig, the Atwood Hunter, arrives,” he said.
“This rig has a completely different capability than the Stena Tay, with the ability to drill in shallower water and to intervene on Chinguetti wells, should that be necessary.”
In the Woodside-operated joint venture, the Atwood Hunter will target initially shallower water prospects similar to the Miocene canyon head plays such as Banda, he said.
The first well in this program will be Colin in PSC, A which has a mean pre-drill estimate of 170 million bbls. This is likely to be followed later by Kilbaro and Awatt.
The Atwood Hunter will also drill two commitment wells in Hardman’s Dana-operated JVs.
“The well in Block 7 has not been nominated yet, though it is likely to seek up-dip oil potential from the Pelican discovery and target a potential 5 trillion cubic feet Flamant structure in Block 8,” he said.
Having brought Chinguetti online, Hardman now wants to maximise Chinguetti’s performance through 2006 both operationally and commercially, optimising offtake and realised prices to sustain a significant income stream, according to Potter.
The company also wants to extend the production profile of that infrastructure by recycling investment in the Chinguetti area. This would involve optimising Chinguetti phase II and continuing to appraise the adjacent existing high-value satellite discoveries at Tevet, Labeidna and the Banda oil-leg, he said.
In addition, Hardman wants to refocus the Mauritanian drilling program in the second half of 2006 to the strong prospect inventory in shallower waters, starting with the Colin Miocene prospect with a mean potential of 170 million bbls and including the potential 5 tcf Flamant prospect in Block 8.
Hardman is also keen to press ahead with the commercialisation of the major discoveries at Tiof and Banda in Mauritania.
Potter said he believed that a liquefied natural gas development could yet be developed in Mauritania.
A likely threshold for an LNG development in Mauritania would be around 4 tcf. Banda is thought to contain up to 2.5 tcf of gas and Flamant could have up to 5 tcf.
While the PSCs do not currently include gas commercial terms, Potter said he thought such terms could be negotiated with the Mauritanian Government.
“These discussions have been temporarily stalled since the change of Government in Mauritania,” he said.
“However, given that the administration and the bureaucracy remain essentially unchanged, we should be able to pick up discussions relatively quickly. With the introduction of Gaz de France into our Dana-operated blocks, the gas discovery at Faucon and the targeting of a considerable gas prospect (Flamant) in block 8 for drilling in 2H 2006, I think these discussions will pick up considerable impetus.”
While the Mauritanian Government is still disputing the validity of some supplementary agreements to the PSCs, this had not affected work or production, Potter said.
“As we’ve seen with the start-up of Chinguetti and the rapid rise to capacity offtake, the dialogue with the Mauritanian Government hasn’t affected operations at all,” he said.
“From Hardman’s perspective, it hasn’t impacted our relationship with the Mauritanian Government which remains good. As operator of the Joint Venture, Woodside is handling the discussions on this issue and … we don’t have any direct involvement in the discussions. We are hopeful that discussions will lead to a resolution in the near term.”
Failure to resolve the issue will lead to the dispute being taken before a European court for arbitration.