Baraka Petroleum Limited announced that it has received notification that the new Mauritanian Minister of Energy and Petroleum, Mr. Mohamed Aly Ould Sidi Mohamed, has approved the farm-out agreement Baraka recently signed with CNPC International Mauritania (CNPCIM), a subsidiary of CNPC International the overseas ventures arm of China’s largest oil and gas company China National Petroleum Corporation (CNPC), for the Company’s 100% owned coastal exploration block (Block 20) in Mauritania’s petrolific Coastal Basin.
The Ministry of Energy & Petroleum has also given approval for CNPCIM to be appointed as the operator of this project as outlined in the farm-out agreement. Under the terms of the farm-out agreement announced to the Australian Stock Exchange on 29 June 2005, CNPCIM will acquire a 65% operating interest in Block 20 by funding 100% of the exploration cost, up to US$8.6 million. This will cover a seismic acquisition
program over the Heron structure and will substantially fund the drilling of the planned Heron-1 well. Baraka will retain a 35% interest in the block.
Baraka Petroleum Managing Director, Max de Vietri, said, “The approval of our of farmout agreement with CNPCIM for Block 20 is an important step in the development of the onshore oil and gas exploration and development industry in Mauritania.”, “We are very grateful that the Minister of Energy and Petroleum has acted so promptly to approve this agreement and are proud that one of the first agreements signed by the new
government Minister relates to Baraka Petroleum, a long term supporter of the development of oil and gas assets in Mauritania. The formal approval of the farm-out agreement enables the Company to commit to work programs within the parameters of the Production Sharing Contract (PSC) and in conjunction with CNPCI to explore and develop Block 20.