| The search for the hydrocarbon
resources needed to end Morocco’s reliance on
oil and gas imports and provide the nation with the
revenue that only ‘black gold’ can provide
is the task of the Office of National Research and
Petroleum Exploration (ONAREP), the Moroccan National
Oil Company. It is arguably the most important and
most difficult mission in Morocco today. ONAREP’s
tireless and dedicated Managing Director, Madame Amina
Benkhadra, is committed to fulfilling the leadership
role bestowed upon her by His Majesty King Mohammed
VI. The hopes of a nation are riding on her shoulders.
ONAREP was created in 1981 with a mandate to serve
as the coordinating body for Morocco’s oil and
gas exploration and production policy and is tasked
with many responsibilities. The international oil
industry must be regularly informed about the constantly-changing
nature of oil exploration in Morocco. A series of
training programs have been established to create
a workforce armed with the latest industry knowledge.
ONAREP’s Documentation Department manages a continually
expanding database that contains the latest research
on Morocco’s hydrocarbon potential. ONAREP also
guides foreign companies through the regulatory process
involved in securing reconnaissance licenses, exploration
permits and exploitation concessions, perhaps the
single most important service provided by the company.
This comprehensive suite of services is tailored to
provide foreign companies with the same world-class
service and support they would expect in Europe or
the United States.
At the beginning of the exploration process, a company
receives a one year reconnaissance license. This phase
is defined by intensive geological and geophysical
sampling and seismic data acquisition. If an area
shows potential, the company works with ONAREP to
secure an eight year exploration permit divided into
a series of sub periods. At this point, exploration
and appraisal wells are drilled to evaluate potential
reservoirs. Finally, if the stars are aligned and
the hard work pays off, the discovery of hydrocarbon
reserves leads to the granting of a 25 year exploitation
concession that can be extended to 35 years.
To date, ONAREP has granted 47 exploration permits
covering 82,000 square kilometers, 66,000 offshore.
Three reconnaissance licenses have been granted that
cover 265,000 square kilometers, including 244,000
offshore. Benkhadra explains that “the offshore
of Morocco is very interesting because of its similarities
with offshore areas of Angola, the Gulf of Mexico
and Nova Scotia.” Morocco and Nova Scotia were
actually neighbors 180 million years ago. Nova Scotia’s
proven petroleum reserves coupled with compelling
2D and 3D seismic surveys of Morocco’s offshore
zones are fueling hopes of major discoveries. Vanco
Energy Company, based in Houston, Texas was in fact
“drawn to Morocco’s deepwater frontier area
because of its geologic relation to offshore Nova
Scotia,” according to the company’s 2001
Annual Report. The continuation of 3D seismic testing
is providing ONAREP and its foreign partners with
the most detailed information to date on potential
oil and gas deposits in the sediment beneath the Atlantic.
The Moroccan people could well be on the cusp of
energy self-sufficiency. “We feel confident
in our potential,” said Benkhadra. “We
will have drilling in three offshore areas by the
end of this year and the beginning of 2004.”
The tally of major oil corporations involved in
the reconnaissance and exploration process in Morocco
stands at 14, and includes Shell, Total-Fina-Elf,
Conoco-Phillips, Kerr-McGee, Vanco, and Petronas.
The hydrocarbon potential of the Western Sahara’s
offshore area is enormous, with two companies already
involved in reconnaissance activity there. The future
of Morocco is inextricably tied to the Western Sahara
for historical as well as the aforementioned potentially
significant economic reasons.
Annexed in 1975 by His Majesty King Hassan II after
the Spanish withdrawal, Morocco considers the region
its southern province. The King used the evacuation
of Spain from ‘the Spanish Sahara’ to
reassert Moroccan sovereignty over the traditionally
Moroccan region. Former U. S. Secretary of State
James A. Baker III was appointed as Special Envoy
for the Western Sahara in 1997 by U.N. Secretary
General Kofi Annan to negotiate a resolution to
the issue. Since that time, Baker has spoken regularly
with Moroccan officials and representatives of the
indigenous Sahrawi people. Talks that began in January
of 2003 have renewed expectations that a comprehensive
solution can be achieved in the near term.
Madame Benkhadra emphasized that “the United
Nations has specifically said that the granting
of reconnaissance rights there (the Western Sahara)
is completely legal.” Explaining that Morocco
is “constructing a modern infrastructure for
the inhabitants of the region, including roads,
hospitals, schools, housing, and industry,”
she is somewhat bewildered by voices from certain
quarters calling Morocco an occupier of the land.
When the time comes for the exploitation of proven
oil reserves, Benkahdra foresees that “it will
be easy for Morocco to demonstrate to the United
Nations that revenue from oil production will be
used for the development of the area.” While
she acknowledges that “there is a problem,”
she believes that the United Nations “is trying
to find a solution that will bring the parties together.”
Morocco is confident in its position and “the
people consider this Morocco’s destiny,”
she explained.
In the more than two decades of ONAREP’s existence,
85 wells have been drilled, 50 of them joint projects
with international companies. This activity led
to the discovery of the Meskala gas/condensate field
near Essaouira as well as several biogenic gas accumulations
in the Rharb Basin. All in all however, finds of
any real significance have proven elusive.
After a period of critical analysis to determine
the reasons why the discovery of major reserves
has failed to materialize, ONAREP made the strategic
decision to seek partners with the expertise to
apply the latest exploratory techniques to Morocco.
Because the vast majority of Morocco’s onshore
and offshore sedimentary basins have yet to be explored,
the country is still considered to be a frontier
exploration area.
In order to provide the oil and gas investor with
the most attractive terms possible, the Moroccan
Hydrocarbon Code was amended in 1992 and again in
2000. Under the terms of the Code, any profits and
dividends earned from oil exploitation activities
are freely transferable outside Morocco and are
exempted from all income and capital gains taxes,
as well as a wide range of other local taxes. Additionally,
the equipment and services necessary for reconnaissance,
exploration and exploitation operations are imported
duty and VAT free.
ONAREP has embarked upon a comprehensive $700 million
development project to upgrade and modernize its
petroleum infrastructure, in anticipation of the
discovery of significant petroleum reserves. Total
crude refining capacity will increase from 7.7 to
10 million tons of crude per year as part of the
modernization and upgrading of existing refineries.
The overhaul of the distribution system involves
upgrading service stations, increasing inventory
capacities, and evaluating additional infrastructural
needs.
Natural gas production in Morocco is minimal, but
the Maghreb-Europe Gas Pipeline (MEG) has the potential
to significantly increase the Kingdom’s supply.
The MEG runs from the Algerian border, across northeastern
Morocco and under the Strait of Gibraltar to Spain.
Its operators pay substantial royalties to the Moroccan
government for the use of its territory. Although
Morocco currently receives no gas from the pipeline,
plans are in the works to change that. A major power
plant now under construction near Tahaddart will
be fueled with natural gas from the MEG.
Benkhadra explained that because the Moroccan industrial
sector has an immediate need for natural gas, construction
is scheduled to begin shortly on a “new network
of pipes from the MEG” that will supply “the
industrial areas along the coast from Casablanca
to Jorf Lasfar.” The MEG’s current capacity
of 10 billion metric tons per year can be increased
to 18 billion metric tons by doubling the capacity
of the compressor stations.
Benkhadra is confident in the future of Morocco,
and as a woman in a position of influence, is proud
of the advancement of women in the past few years.
She noted that in the parliamentary elections of
September 2002, “35 women were elected to Parliament
where there were only two before.” She made
it very clear that the advancement of women in Morocco
is “a key link in the development of the country.”
She noted that a U.S.-Morocco Free Trade Agreement
will “bring more U.S. investment to our country,
which is the most important thing.” To Benkhadra,
the political stability of the country and the sweeping
societal reforms ordered by His Majesty are the
pillars that Morocco will build its future upon.
She will not consider Morocco’s development
plans fully realized however, until that special
day in the future when she announces the discovery
of oil in Morocco.
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