LONDON: Oil companies are stepping up exploration in Morocco, attracted by its stability relative to other parts of North Africa and encouraged by advances in geology and technology that indicate its potential for reserves offshore.
Independent explorers have snapped up rights to explore offshore blocks over the past 18 months, and they are now making way for big players seeking acreage in a nation once dismissed as the energy-poor neighbour of Opec members Algeria and Libya.
Damon Neaves, managing director of Australia’s Pura Vida Energy, said 10 exploration wells would be drilled off Morocco in the next 12 to 18 months, compared with only nine since 1990, according to analysts’ estimates.
“That represents an investment of $500m to $1bn, and that is a big show of confidence from the industry,” Neaves said. “It is still a frontier region and is underexplored compared to other parts of the world.”
BP is the latest oil major to enter Morocco, announcing a deal with Kosmos Energy this week to take a share in three offshore blocks. Drilling will begin next year. Britain’s Cairn Energy said that it would shortly begin drilling off the Moroccan coast. They follow Chevron, the second-largest US oil company, which said in January it had taken up three offshore blocks.
By contrast, some oil firms have recently turned away from Libya due to disappointing finds and supply disruptions and from Algeria, where security concerns have mounted since an attack on a gas plant this year killed 40 workers.
“North Africa and particularly Libya and Algeria are looking less appealing than they have done for five years,” Geoff Porter, founder of North Africa Risk Consulting, said. “Conversely, Morocco is a quiet hive of activity.”
Pura Vida this year found a partner for its Mazagan block. Drilling is to begin next year on the Toubkal field, which it hopes could hold over 1 billion barrels of oil.
Excitement over Morocco has grown as technology has helped firms to discover new oil and gas fields over the past decade in regions that were formerly overlooked.
Huge finds deep under the seabed off Brazil’s coastline have raised hopes that similar hydrocarbon formations lie unexploited off the African coast. Early finds offshore countries including Ghana and Angola have further piqued the interest of majors with deep-water experience.
“We look at the Atlantic margin as a whole,” BP spokesman Robert Wine said. Oil companies also are encouraged by Morocco’s relatively attractive fiscal terms and its infrastructure, including port and rail facilities. Reuters
