Until recently Morocco appeared to be geological anomaly—located in the midst of an oil producing region, with precious few resources of its own.
Indeed, the chronic shortage of locally produced energy generated a government policy that encouraged the use of coal and hydroelectric power. On an annual basis, Morocco imports about $800 million worth of oil from Iran, Iraq and Saudi Arabia.
The kingdom actually possesses significant oil shale deposits in the Atlas Mountains, but for economic reasons they have not been exploited.
It also produces small volumes of natural gas from a field in the north, and appears to have a large-size gas field at Meskala, north of Essaouira.
Morocco did strive to find oil and gas, and also to lure investors to search for hydrocharbonate resources in the country.
But in these efforts, it met with little success–until 1999 that is, when the Moroccan government passed a law that extended a 10-year tax exemption to foreign oil concerns operating in the country.
As a result, several second-league firms set up operations, including Saudi-Armco, ROC of Australia, Sweden’s Taurus, and U.S.-based Skidmore, which was committed to invest at least $50 million in the Ounara onshore area.
Another company, Lasmo, was already active in Ras Tafalney, located offshore near Essaouira
The first significant discovery of oil took place in August 2000, onshore in the Talsint basin, 200 km from the Algerian border. The company making the discovery was Lone Star, a subsidiary of Skidmore.
The reserves are thought to be in the region of 1.5-2 billion barrels, which represents 25-30 years’ worth of Morocco’s oil consumption
In September and October last year, the Moroccan government issued tenders for offshore prospecting over an area stretching from the capital Rabat, in the north, to Safi in the south.
The government issued licenses for two companies—Lasmo and Vanco—to conduct 3D seismic searches over the 3,000 square kilometer area, starting in March 2001. A 2D seismic search, which was conducted between 1998 and 2000 by Vanco, identified at least 35 indications of hydrocarbon deposits.
In the meantime, Morocco is working hard to develop its energy infrastructure. In October 1998, IPIC and Cepsa formed a 50-50 joint venture called Cepsa Maghreb, to market and distribute petroleum products and liquefied petroleum gas (LPG) in the country.
Products are to be supplied from Cepsa's refineries in Spain. The French company Vitogaz is building an LPG import terminal and tank farm near Casablanca.
The Spanish oil and gas group Repsol has also announced its intentions to invest $20 million in Morocco's energy sector over the next 5 years.
Morocco has two oil refineries. The country’s two refining companies—Samir and SCP—agreed in late 1998 to merge in the first quarter of 1999. The two, which are owned largely by Corral Petroleum Holding of Sweden, have a combined refining capacity of around 156,000 bbl/d.
Although, at present, Morocco holds only limited natural gas reserves of its own, Morocco is a major transit center for Algerian gas exports across the Strait of Gibraltar to Spain, which move via the 300-billion-cubic-foot-per-year Maghreb-Europe Gas (MEG) pipeline.
In November 1999, Spain’s Natural Gaz SDG announced its intention to invest up to $400 million in a natural gas distribution network for Morocco.
Will Morocco become a significant oil exporter? The country undoubtedly has potential, and also the cause to do so. A shift from oil importer to oil producer will save Morocco as much as $1.2 billion per annum, representing 3.4 percent of GNP. It will also help downsize a huge, $19 billion external debt.
But several years will pass before the country will be able to use its oil deposits for its benefit. Despite a degree of progress, the kingdom’s infrastructure is still underdeveloped, and some significant investments are required.
© 2001 Mena Report (www.menareport.com)
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