Chinguetti partners dispute corruption stories

THE Chinguetti partners have defended the validity of their Mauritanian leases and production sharing contracts, after overseas media reports claimed the country's former energy minister was being investigated for corruption involving foreign oil companies.

One French report, by the Jeune Afrique news service, said minister Zaydane Ould Hmaidah had been questioned over deals with Australian, Canadian and European oil companies, which allegedly allowed them to avoid paying full taxes.

Woodside, 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.

A Woodside spokesperson told the West Australian the company did not know whether Zaydane had been arrested, but was confident about the validity of its Mauritanian operations.

In a statement to the ASX, Woodside said it was "continuously and routinely" engaged in discussions with the government on behalf of its joint venture partners.

"Such discussions are common in the oil and gas industry as joint ventures move from early stage exploration to production and often involve amendments and clarifications to PSCs," the company said.

"Amendments and clarifications to Woodside-operated PSCs were negotiated with the former minister and his department, and approved by the Mauritanian government and the Mauritanian Parliament before becoming law in 2005."

Woodside, which operates Chinguetti with a 47% interest, also said the A$974 million project was on schedule to start production next month.

The other partners, Hardman Resources (19%) and Roc Oil (3.3%), also responded to the media speculation in statements.

"The relevant joint venturers, through Woodside as operator, are presently engaged in ongoing discussions with the Mauritanian government concerning elements of agreements which are supplementary to some production sharing contracts," Hardman CFO Peter Thomas said.

"The supplementary agreements include clarifications as to how provisions of the PSCs should be applied – for the benefit of both the joint venturers and the government."

Roc Oil's general manager of corporate affairs, Michelle Manook, said negotiations between oil companies and governments were not uncommon in the international petroleum industry.

"Often this is due to the need for clarification of various non-core elements in documented agreements, which typically arises as a joint venture moves from early stage exploration to first oil production," Manook said.

But the rumours were enough to scare the market. Woodside fell $1.60 to $41.80, Hardman lost 9.5c to $1.87 and Roc dropped 4c to $2.91.



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