Chinguetti production to start next month

PERTH-based Hardman Resources says the Chinguetti partners - which also include Australian companies Woodside and Roc Oil - are on track to start production at this major offshore West African project in the second half of February.
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Hardman said development of the Mauritanian oil field was now 96% complete and production was expected to ramp up during March and reach peak rates in April. Output then should be about 75,000 barrels a day.

Chinguetti’s final budget forecast remains at US$705 million (A$935 million), with a continency of US$45 million (A$59.7 million), Hardman said.

Cashflow from Chinguetti would be used to fund the company's exploration programs in Mauritania and Uganda, according to Hardman managing director Simon Potter.

"Chinguetti production, bringing strong revenues boosted by the high oil price, is close at hand," he said.

"During 2006 we shall begin deploying these revenues to accelerate development of the group."

However, a cloud has been cast over the project with Chinguetti operator Woodside having been named in accusations of fraud and corruption against former Mauritanian oil minister Zeidane Ould Hmedia.

Last week, media reports said Hmeida had been imprisoned and was awaiting trial.

Reuters South Africa reported that prosecutors claim an amendment to a production sharing contract with Woodside that Hmeida signed in December 2004 reduced the share paid to the Mauritanian state.

But the Chinguetti partners defended the validity of their Mauritanian leases and production sharing contracts, after reports surfaced over the alleged corruption.

Operator Woodside and partners Hardman Resources and Roc Oil told the ASX in separate statements that discussions with the Mauritanian government were continuing over their PSCs in the country, but said this was normal.

Chinguetti is the first oil development in the impoverished West African nation, and the new government expects oil development to generate economic growth of 20% cent this year.

Despite fears the corruption allegations Hardman shares closed up 3.5 cents at $1.935 on Friday and opened at $1.95 today

Roc closed at $3.04 on Friday and opened at $3.07 today.

Woodside closed at $4.472 on Friday and opened at $4.580 today.

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