Mauritania’s bid to become an African energy hub

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US power stocks plunged yesterday after advances by Chinese artificial intelligence start-up DeepSeek forced investors to question narratives around the enormous energy demands needed for AI and American dominance of the market.

Vistra, GE Vernova and Constellation Energy were among the 10 worst performers on the S&P 500, with their share prices all falling upwards of 20 per cent. Stock prices for power and utility companies had ballooned over the past year as forecasts that AI will trigger a rapid rise in power demand prompted a desperate search for electrons. But DeepSeek’s success in matching the capabilities of US AI models with lower energy consumption and a smaller budget have prompted investors to rethink investments into AI infrastructure.

Elsewhere, as the Trump administration casts uncertainty over the US renewables sector, the Middle East is racing ahead, becoming the fastest-growing market for green energy sources outside of China. More on the region’s rapidly changing energy mix here. 

In today’s Energy Source our correspondent Aanu Adeoye dives into the energy ambitions of Mauritania. The north-west African country is betting that its gas reserves will drum up investment and transform its economic trajectory.

Thanks for reading,

Amanda

Gas discoveries fuel Mauritania’s energy ambitions

Mauritania doesn’t make the news often. A vast desert country wedged between the Sahara and the Atlantic Ocean, very little of what happens in the nation of nearly 5mn people is the subject of international headlines.

But that may be about to change, thanks to gas gushing from its bountiful reserves that could transform its largely agriculture-based economy and turbocharge growth in one of the world’s poorest countries.

British energy giant BP began producing gas for the first time earlier this month from the Greater Tortue Ahmeyim project, a massive liquefied natural gas field off the coast of Mauritania and its south-western neighbour Senegal, which is forecast to have annual production capacity of 2.3mn tonnes. So important is GTA that both countries have dubbed it a “project of strategic national importance”.

With a production potential of at least 30 years, GTA, which is operated as a partnership between BP, American energy group Kosmos and the state-owned energy companies of Mauritania and Senegal, could transform the global energy supply chain, diversifying gas export markets while also providing power needed for growth in both countries.

Mauritania’s government is banking on GTA to anchor growth in 2025, amid a broader slowdown in other extractive activities. GDP growth this year is expected to be 4.2 per cent, broadly similar to last year’s pace of 4.6 per cent, according to the IMF, largely due to an estimated 23.5 per cent decline in gold production as certain mines reach the end of their productive cycles. Iron ore production, long a mainstay of the Mauritanian economy, is also predicted to fall.

It is against this backdrop that the government is attempting to lure deal-hungry investors to its oil and gas industry. Smaller gasfields, such as Banda, which was discovered more than two decades ago but was only signed up last year for exploration and gas production, are expected to supply electricity for domestic consumption.

Yet for all the enthusiasm and potential of Mauritania’s gas discoveries, risks and pitfalls abound. Both Senegal and Mauritania are carrying out audits of the development costs of GTA, with an eye on extracting better terms from BP and Kosmos. While Mauritania’s audit is complete, Senegal’s broader examination of its oil and gas industry contracts is ongoing and has left investors on edge.

The two countries also have a diplomatic relationship that is often tense, rooted in Senegal’s anger over Mauritania’s historical treatment of its Black African citizens. Mauritania has Arab-Berber and Black African ethnic groups, and was the last country in the world to outlaw slavery. Human rights groups say the practice still persists.

“There’s a tension in the relationship between both countries and it dates back to the racial baggage underpinning it,” said a former senior western diplomat who worked in the region.

A spat over the name Senegal chose for its support vessel for the GTA project that evoked a long-forgotten battle between the two countries is an indication of the fragile peace existing between them, the diplomat added.

Both parties need a functional working relationship to navigate a potentially tricky renegotiation with their technical partners.

There is also a potential Donald Trump-shaped stumbling block to Mauritania’s ambitions. With the country’s gas finds requiring billions of dollars in investment to develop, potential investors are likely to be from the US. But the US president’s pledge to “drill, baby, drill” could mean investors focus their efforts on domestic projects ahead of a country that is still not widely known on the energy scene, said one investor.

Investors are said to be generally pleased with the Mauritanian government’s approach to drumming up investment, with the country’s officials making the rounds at energy conferences over the past year.

Oil minister Mohamed Ould Khaled has said the country has reformed its investment codes to attract foreign capital, is offering tax breaks and bringing in stronger protections for international investors. “These reforms aim to position Mauritania as a regional energy hub, particularly in renewable energies and natural gas, by creating a safer and more attractive environment for foreign investors,” he said.

Mauritania has been here before. In the early 2000s, Australian energy group Woodside Petroleum discovered an oilfield with potentially modest returns. But it became mired in allegations of corruption against government officials and the field was not as prolific as first hoped. The asset changed hands and is no longer active. The task for authorities now is to ensure the second time’s the charm for Mauritania’s gas finds. (Aanu Adeoye)

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Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.