Marrakech- At the Morocco Oil and Gas Summit press conference held in Marrakech an event hosted by the Moroccan office for Hydrocarbons and Mines (ONHYM) and the international Research Netweork (IRN)— on May7-8tAmina Benkhadra, director of the Moroccan office for Hydrocarbons and Mines, strongly defended ONHYM’s record in supporting the growth of oil and gas exploration and investment in Morocco.
She said that exploration companies had a 75% share of revenues from oil and gas, and ONHYM as their partner took a 25% share. Benkhadra was joined at the Press Conference by Carl Attallah Vice President and Country Manager of Chevron Morocco Exploration, Mehdi Sajjad President and CEO Gulfsands Corporation and Gerald Lane Finance Director Kosmos Energy.
It is worth contrasting this with Algeria, which includes a 51% share in Sonatrach’s favor; Libya, under EPSA IV, contributes 80-90% of production. On a global scale, Morocco has the most favorable oil and gas exploration terms. The proof of this liberal policy’s success can be seen in the fact that 34 international oil and gas companies (IOC’s) are now operating in Morocco with 131 exploration licensing permits. The investment growth in the oil and gas sector in 2013 and 2014 has reached 7.4 billion dirhams. This is the fruit of a great deal of work by Amina Benkhadra and ONHYM to spread the word internationally about Morocco’s oil and gas potential. The emergence of new 2-D and 3-D seismic surveys have helped to narrow down exploration fields and highlight promising geographical signs of hydrocarbon systems.
Mehdi Sajjad was very excited to have signed the agreement for the Moulay Bouchta permit on 28 April 2014; it was part of the Res and Rharb concession. He stressed that Morocco is under-explored and that Gulfsands is in Morocco for the long term. He added that Gulfsands would be drilling three wells as part of the Moulay Bouchta and Fes permits. Moroccan geology exploration is extremely challenging. Gulfsands has had to stop their very successful operations in Syria because of sanctions and the ongoing security situation there. Sajjad and Carl Attallah stressed that exploration is a long-term business and can take years before a discovery becomes commercially successful. Attallah observed that there were no pessimistic explorers, the exploration required time patience, and a lot depends on the capital markets because oil companies are driven by their shareholders. Morocco is the only relatively unexplored region in North Africa. Oil companies are working in Morocco as part of diversifying their portfolios and spreading the risk worldwide. The Kingdom is attractive because of its stability and good security situation.
Moroccan journalists questioned—if everyone in the conference was so optimistic—why were there no successful oil discoveries, and why had wells been plugged at Taryfaya and Foum Asaka. Benkhadra explained that these were not withdrawals from Morocco, and that both companies were continuing with their drilling at these locations as per their contracts; indeed, Cairn is already working on another well. Drilling is naturally exploratory, she explained to the Moroccan journalists. She observed that no one had said that exploration would be an easy task, and she reminded the journalists that it took Chevron four years of dry wells before they struck oil in Dammam in the Eastern Province of Saudi Arabia. The Ekofisk field in the North Sea was only discovered after 200 wells had been drilled, she pointed out.
Attallah stressed that all the information gathered during drilling operations was of use in providing more information in helping to narrow down and identify further drilling sites. He and his colleagues also pointed out that in the deep offshore drilling some years ago, 90 feet was considered deep; but now, drilling is going on at 2,000 and 3,000 ft. Before these developments, deep-water drilling was considered irrelevant; now, however, it is the most important exploratory activity. This has changed the possibilities for oil and gas exploration in Morocco, but it remains a challenging business and discoveries are hardly ever made on the first exploratory drilling. The more data acquired, the more it helps to guide the exploration effort.
Benkhadra said there was no deadline on the exploration efforts, and that discoveries could happen at any time. ONHYM will continue work to encourage more oil and gas companies to invest in Morocco. She urged Moroccan journalists to understand the reality of the long-term exploration process. It is understandable that the journalists were asking about positive results, but this will take time, investment, and effort by the international oil and gas exploration companies.
Benkhadra also confirmed that Morocco had potential for 50 billion barrels of unconventional oil, including shale oil and gas. But this exploration is just beginning. She stressed how attractive Morocco is for foreign direct investment due to political and social stability, as well as excellent infrastructure and the favorable legislative and fiscal environment.
Edited by Katrina Bushko
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