Government run ONAREP helps promote energy sector opportunities and is ready to assist partners carry out their exploration work.

merican oil companies are taking an increasing interest in Morocco. Big names such as Conoco – which recently tied the knot with fellow U.S. firm Phillips – and Kerr McGee are now active in the hunt for hydrocarbons off the Moroccan shoreline. Other prominent international players include Anglo-Dutch giant Shell, France’s TotalFinaElf and Malaysia’s Petronas. The number is growing.

The Moroccan government has made the search for oil and gas a top priority since the country relies heavily on imports – as much as 85 percent – to meet its energy requirements. It is also promoting the development of renewable resources such as solar and wind power. It is keen to see more U.S. companies take an active role in upstream exploration work.

MUSTAPHA MANSOURI Minister of Industry, Trade, Energy and Mines

Mustapha Mansouri, Minister of Industry, Trade, Energy and Mines, says that exploration work is still at an early stage. “In terms of petroleum we are still at the beginning,” he says. “We haven’t discovered any real reserves yet, but we have good potential.”

While Morocco showed the first evidence of its hydrocarbons potential in the early part of last century, little development of these resources was ever undertaken. The arrival of more foreign firms is an exciting recent development, adding fresh impetus to the relatively underexplored Moroccan territory. “What is new today is that most of the firms are interested in the offshore,” says Mr. Mansouri.

These first international arrivals have been rewarded in many cases with vast tracts of offshore exploration along Morocco’s long coastline. Kerr McGee has a 100 percent interest in a reconnaissance permit covering more than 27 million acres in the offshore Boujdour block. The acreage lies in water depths ranging from the shore to more than 10,000 feet, and extends about 350 miles along the coast. It also has a 50 percent interest in the nearby three million acre Cap Draa block.
The National Office for Oil Research and Exploitation (Office National de Recherches et d’Exploitations Petrolieres) (ONAREP) is the government organization responsible for the hydrocarbons sector. It dates back to 1981 and must take some of the credit for the fact that Moroccan oil is starting to look more and more attractive.

AMINA BENKADRA Managing Director of ONAREP

Amina Benkadra, Managing Director of ONAREP , says that the organization participates at conferences and seminars throughout the world to promote the opportunities on offer. It also played an important role in shaping the new energy investment laws alongside the ministry. “We have modified our legislation in March 2000 and we now have a more enticing hydrocarbon code that offers more advantages to companies than before,” she says.

In the last four years, the number of foreign oil companies in Morocco has risen to 14; others are expected to follow as the province matures. The country has a huge sedimentary basin that is largely unknown. Exploration firms are only now using state-of-the-art 3D seismic technology to analyze the sub-sea potential. “We are still behind international norms when it comes to exploration,” she adds.

Timing is another important factor. With the advent of modern exploration techniques, areas that were accessible 10 years ago, but difficult because of certain parameters or because exploitation conditions were not assured, have now become more viable.

Ms. Benkadra says these techniques have allowed important new oil provinces such as the Gulf of Mexico and the Gulf of Guinea in west Africa to be exploited. “In the last decade there has been a considerable evolution in exploration techniques in the offshore and deep offshore and a reduction of almost half the cost,” she says.
Under Morocco’s new hydrocarbons legislation, the state – through ONAREP – takes only a small equity share, leaving private operators in charge of their work and free to bring in additional partners. Ms. Benkadra says that ONAREP is ready to help but does not impose anything.

She believes that foreign oil companies should seize the opportunity. “The conditions are favorable, the code is flexible, the state participates with just 25 percent, so the investor has the majority, and besides, he can look for his partners himself to share the financial and technical risk with him,” she says.