Morocco's gas rush: a flurry of foreign energy companies ranging from oil & gas majors such as BP to small exploration firms have their eyes set on Morocco's yet untapped gas reserves, one of the most energy-poor countries in the world.

Author:Kan, Charlotte
Position:Business/COMMODITIES
 
FREE EXCERPT

WHEREAS SOME OF ITS NEIGHBOURS have had their coffers boosted by decades of intensive oil and gas production, Morocco remains an energy loser. Despite decades of exploration, the kingdom has failed to produce the vast quantities of primary energy required to sustain its fast-growing domestic demand, which has nearly doubled in less than a decade, according to the Moroccan Ministry of Energy. Due to improvements in living standards and natural growth, demand for primary energy (gas, oil, electricity, etc.) is forecast to accelerate even further in the future and will actually triple between 2010 and 2030, reaching 43 million ton of oil equivalent (toe) in 2030, the Ministry of Energy estimates. Currently the country has to import up to 95.5% of it, making it one of the most energy-poor countries in the world. The majority of its energy imports flows in from neighbouring Algeria through the Maghreb-Europe natural gas pipeline (MEG), which links the country to Spain. This comes at a price: energy bills have more than trebled since 2002 to reach 87bn Moroccan dirhams ($10.6bn) in 2011.

Untapped potential

Morocco has vowed to curb its costly reliance on energy imports, and is too happy to cooperate with the industry players that have flocked to the country in the past years. These companies consider Morocco to be largely under-explored compared to its neighbours, and believe it may hide greater gas reserves in particular than previously thought, especially offshore. A 2013 report by the US Energy Information Administration (EIA) corroborates their thesis. The assessment by the EIA of shale oil and gas resources indicated that Morocco has 20 trillion cubic feet (tcf) of technically recoverable shale oil and gas resources, with the great majority located in the Tindouf basin, and smaller amounts in the Tadla basin. Investment bank Citigroup notes momentum is building in the country. "We see Morocco as an under-explored hydrocarbon province that offers high-impact exploration opportunities across multiple play-types. The material resource potential coupled with attractive fiscal terms has seen a recent pick-up in corporate activity in the region with larger independents (Genel Energy and Cairn Energy) and IOCs (Chevron, Total and Galp) securing offshore acreage," the US institution said in a recent report on the oil and gas sector.

Hopes, but not much else

"We have not made any sensational discoveries yet ... But we are in a situation where the...

To continue reading

REQUEST YOUR TRIAL