MoroccoMorocco represents a favourable investment opportunity for Island. The country is politically and economically stable and is growing in importance as a potential new energy market in Northwest Africa as deregulation of the oil and gas industry is being implemented to create the freedom to sell oil and gas to the domestic market. Morocco’s gas consumption over the next five years is estimated to be 115 bcf, rising to 175 bcf by 2015. Morocco currently imports 78% of its requirement for gas. The gas is used mainly for power generation and refinery operations. The demand for electricity is currently growing at 8% per annum in Morocco which shows that the country is hungry for new sources of energy supply. To address this, Morocco is also planning to build a 176 bcf LNG Terminal in either Jorf Lasfar or in Tangier and a 400 to 500 kilometre pipeline which will connect the terminal to the main industrial centres and to future power plants. Morocco is promoting the development of gas consumption. A ‘Gas Code’ has been implemented and it will be approved by the Government and the two Chambers of Parliament by the end of 2009. Morocco’s current refining capacity is 7.7 million metric tonnes but is expected to be increased in the near future. The average annual growth rate of demand for petroleum products is 6.5%. There is a growing hydrocarbon transport infrastructure system, including pipelines, ports, tankages and Indigenous oil and gas production is limited. The current oil production is restricted to 11,100 metric tonnes per annum. Gas production increased from 26 thousand cubic metres in 2005 to 61 thousand cubic metres in 2007 from which currently only 7.5% of the produced gas is used for power generation. In 2006, ONHYM, the Moroccan State oil company, also made gas discoveries in the Gharb region, which are reported to have combined resources of at least 10m cubic metres. There is significant renewed industry interest in Morocco with 30 foreign companies holding interests in 100 permits. The presence of active petroleum systems has been confirmed by drilling to date which has proved up commercial resources in the more adequately explored basins. However, many sedimentary basins remain sparsely explored, particularly the Palaeozoic basins, which bear great geological similarities with the prolific oil- and gas-producing basins of Algeria and Libya, and the offshore basins, where the geology also bears some similarities with the neighbouring deep-water basins in Mauritania, where recent world-class discoveries have been made. The under-explored nature of Morocco is reflected in the current well density of 0.04 wells drilled per 100 square kilometres, much lower than the global average of eight wells per 100 square kilometres. The statistical chance of new significant oil and gas finds being made is therefore high, particularly in those areas that were lightly explored in the 1960s and early 1970s before the advent of modern seismic acquisition and processing techniques. ONHYM has a highly skilled technical and administrative team that allows for rapid award of licences relative to many other countries. In addition there is an exhaustive and freely accessible exploration database available. Morocco has an attractive fiscal regime which includes the following key features: Morocco is therefore a country that is ideally suited to the Island business model: low entry costs; under-explored but with several proven and active petroleum systems; benign fiscal regime; strategic geographic significance with respect to the European gas market and a potential North American LNG market; and energy hungry with the exploitation of indigenous oil and gas resources being positively encouraged. Click on map for a larger image.
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