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Morocco lures most savvy oil explorers
Published in The Saudi Gazette on 21 - 07 - 2012

RABAT – Geologists, engineers and company executives are new visitors to Morocco. And they are part of the transformation of the country, which has become a magnet for some of the world's most savvy oil explorers
The country is host to Total, Anadarko, Kosmos and Repsol as well of some of the smaller, more entrepreneurial groups such as Tangiers Petroleum, Pura Vida and Longreach Oil & Gas.
Fastnet Oil & Gas, which is essentially the team behind Cove Energy's huge successes in Tanzania, this week announced it had farmed into offshore acreage in Morocco.
Meanwhile, the acquisitive Genel Energy, which is active currently in Kurdistan, another of the world's oil hotspots, is reported to be on the cusp of closing a deal there.
The country is chronically under-explored, although that is changing with the latest influx of oil companies.
Yet there is oil and gas onshore, and a ready market (Morocco is a huge hydrocarbon importer).
However, the real pull internationally seems to be the nation's offshore assets.
Tangiers reveals the Atlantic waters off Morocco could harbor a rich bounty.
It estimates the unrisked recoverable resource from its concession on the Tarfaya block could be anywhere from 156 million barrels to an eye-popping 5 billion barrels. Pura Vida's Mazagan permit area, meanwhile, could contain 3.2 billion barrels.
It bought Mazagan for A$3.5 million last October, and in doing so acquired some of the last remaining open acreage. This was quite a coup.
"Morocco needs to develop its oil industry, particularly its deepwater potential," said Pura Vida managing director Damon Neaves.
"To do this they need to attract the big companies into the country. They saw us as having the technology and expertise to do this: the modern seismic reprocessing techniques in particular.
"They saw us as a conduit to bringing in the big, deepwater operators to make the big investments required to pursue deepwater drilling."
The country's burgeoning hydrocarbon wealth is obviously a pull, but there are other reasons why companies are flocking to Morocco.
The unrest that has swept the rest of North Africa has singularly failed to threaten the country, which is a parliamentary constitutional monarchy.
Meanwhile, the fiscal terms there for oil and gas producers are amongst the most attractive anywhere in the world.
The state receives 25 percent of any project and a five percent royalty if gas is produced, which rises to 10 percent for oil.
An unprecedented 10-year corporate tax holiday is offered upon discovery.
This means the government take is never more than 35 percent. Contrast this with Algeria, where the authorities take 92 percent and you can see why foreign investment is flooding into Morocco.
And under this regime, the economics of the smaller projects look very attractive.
Tangiers Petroleum holds a 75 percent stake in the Tarfaya concession (the remaining 25 percent is held by the state national oil company).
It has an un-risked prospective resource of 867 million barrels, with a high-end estimate of almost 5 billion. "It is not one prospect, it is multiple prospects and they are different types of prospects," said chairman Mark Ceglinski. The major event in Morocco will be the farm-in deal, with the partner expected to drill two wells before the year-end at an estimated "$25 million per hole".
Longreach Oil & Gas was one of the first movers in Morocco and has five licenses covering seven offshore blocks and 21 onshore blocks. That adds up to a huge land position covering 13 million acres containing 70 leads and prospects with significant hydrocarbon potential. – Agencies


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