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Moroccan Energy Minister: We are close to the finish line in oil search

Asharq Al-Awsat speaks with the Kingdom's minister of energy, mining, water and environment as his country begins a major oil exploration push

Asharq-Al-Awsat

Abdelkader Amara (Asharq Al-Awsat)

Marrakesh, Asharq Al-Awsat—Of all the countries in North Africa, Morocco is perhaps the least associated with fossil fuel production, in contrast to neighboring Algeria—a major gas exporter—and oil-rich Libya.

As things currently stand, Morocco relies on imports for the vast majority of its energy needs. However, 2013 saw something of a boom in oil exploration off the country's coast by major international energy firms, fueled in part by the discovery of significant oil deposits off Brazil in areas with similar geological features.

Asharq Al-Awsat spoke to Abdelkader Amara, Morocco's minister of energy, mining, water and environment, about the exploration efforts, and why—despite growing hopes that the Kingdom may have a bright future as the Norway of the Maghreb—it may be years before Moroccans see any tangible benefits of oil drilling.

Asharq Al-Awsat: The recent news of oil exploration in Morocco has raised hopes among the public that the country could become a major oil producer. What do you think?

Abdelkader Amara: There is no doubt that Moroccans are excited and waiting for what will come out of the current oil explorations. But I would like to remind [everyone] that scientific and technical data [should not be] approached in an emotional manner.

It is well known that in oil and gas exploration there is the so-called "petroleum system," a number of indicators which show us whether the sedimentary basin is eligible for hydrocarbons production. [What] we are talking about is a number of signs that a certain sedimentary basin has possible petroleum stockpiles, which is something that opens the door to geological, geophysical and geochemical studies. There are also seismic surveys in their 2D and 3D forms. After this stage of seismic surveys, the exact spot to be drilled for oil needs to be determined. This stage may take 10 to 15 years, between collecting data about the petroleum system and the stage of drilling. The drilling stage could be either positive—when there is a petroleum stockpile—or negative. However, it cannot be 100 percent negative because drilling gives information about the topography of the strata which is beneficial for determining where to drill next.

Consequently, when we say we have . . . technical and scientific information, it does not mean that we have developed machinery that can tell us by scanning a certain area if there is oil or gas. This is impossible, and experience across the world has shown that in some cases hundreds of oil wells are drilled in this stage...In the North Sea, for example, 200 oil wells had to be drilled. Once this issue is clear, we, as the people in charge, will understand what is required from us, namely increasing the pace of drilling.

According to statistics on the number of offshore and onshore oil wells drilled in Morocco so far in the past [few] decades, we have not exceeded 300. This means that the number of wells drilled per hundred square kilometers of eligible sedimentary basin is 0.05, while the global average is around 10. This shows that oil exploration is still ahead of us before we can say we have exhausted all possibilities . . . Therefore, what basically concerns us is increasing the extent of drilling and attracting international drilling companies. It must be noted that the drilling process is extremely expensive to the extent that offshore drilling, for example, costs at least 700,000 US dollars a day. This only covers the cost of hiring the drilling station. This is not to mention other logistical issues.

Q: What reasons are there to believe that Morocco has untapped oil reserves?

Objectively speaking, there are two signs: first, the increase in drilling; second, major companies, such as . . . ExxonMobil, Total, Repsol and Kosmos Energy have expressed interest in Morocco. This is proof that the sedimentary basins in the Kingdom of Morocco have become attractive [to major international firms]. This requires us to concentrate our efforts in forthcoming years. When we look at what we have done in terms of the explored areas, which is approximately 400,000 square kilometers' worth of sedimentary basin, we realize that there may be some promising discoveries in the marine areas, between central and southern Morocco. This is not to mention that we still have similar efforts to make in the internal areas, particularly in Tendrara in the east, Béni-Snassen in the northeast, Tangiers and Larache in the north and in the west [respectively].

With regards to stepping up drilling, we expect we will have drilled 30 oil wells by the end of the year, which is a record as far as Morocco is concerned. Our concern now is for companies to work enthusiastically and dynamically because their success will attract [companies] to Morocco and its sedimentary basins.

Q: Does this mean that Moroccans still have to wait for the outcome of the explorations?

Moroccans should be assured that compared to the past, the present bodes well. We are few meters away from the finish line in the oil exploration race. The indicators remain positive in Morocco compared to other countries. In addition, oil companies operating in Morocco are reassured that things are promising.

Q: Why has Morocco become a destination for major international oil companies?

There are two factors. First, we have amended the Hydrocarbon Law. The present law gives drilling companies 75 percent of the proceeds, an unprecedented share worldwide. This means that companies are ready to take higher risks in terms of exploration. Some companies have declared that if oil is discovered in Morocco, each barrel will make seven times as much profit as in other countries. The second factor is geostrategic, in the sense that fossil energy in general is declining. The dwindling of fossil fuels has prompted a number of countries to use unusual sources of energy. As a consequence, this geostrategic shift makes countries such as Morocco, which is a borderline area in energy terms, [more] attractive to oil companies. An additional key factor which is important to the investment climate in general is the political stability of Morocco, particularly since we are talking about high-cost investments. In the absence of political and institutional stability, international companies cannot risk investing in oil exploration, particularly as in addition to the large financial costs the process takes a long time, which may extend up to two decades.

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