Overview
Morocco has a substantial infrastructure to support an active oil and gas exploration and production industry. Major seaports, roadways, airports, pipelines and refineries are near large cities endowed with the usual European and North American style amenities.
Morocco has upstream potential which is being developed. Although hydrocarbon occurrences in Morocco are represented by a variety of liquid and gas accumulations ranging from dry gas in the Rharb Basin, condensate in Essaquira, light oil in Essaquira and Prerif, to heavy oil in Tarfaya, most sedimentary basins are still largely unexplored. Exploration activities can be conducted all the year round.
Morocco has a well-developed downstream industry. Refineries owned and operated by Opil are located at Sidi Kacem and at Mohammedia near Casablanca and have 7 million ton capacity. They annually deliver about 4 million tons.
The Maghreb-Europe gas (MEG) pipeline has been operating since November 1, 1996. In its first phase the MEG will supply Spain and Portugal with gas. The 350 bcf of gas flowing yearly through the MEG can be doubled in the future to supply any other market on its way. The costs of the MEG portion crossing the onshore Morocco and the straits of Gibraltar is $US 800 million financed by gas consumers in Spain and Portugal. In Morocco, the exploitation of the MEG is ensured in a private framework.
Upstream
Compared to its prolific oil producing neighbour Algeria, the North African Kingdom of Morocco has a modest upstream oil industry. Exploration for oil in Morocco first began in 1929 and by 1939, production was 5,000 tons/year (100 b/d) of oil. Crude oil output increased steadily up to the early 1970’s reaching a peak of 420,000 tons.. The country’s current proven reserves are estimated at 60,000 tonnes of oil, 1,020 million cu. m. of natural gas and 160,000 tonnes of gas condensate. In addition to oil and gas resouces, Morocco also has oil shale deposits at Timahdit and Tarfaya in the Atlas Mountains. Exploitation of these deposits has so far not been undertaken due to cost factors.
The Moroccan sedimentary basins cover a total exploration area of 417,000 sq km. The number of exploration wells so far spudded does not exceed 242 wells, a drilling density of 1 well per 1723 sq km or 0.06 well/100 sq km.
A more detailed analysis shows that the onshore sedimentary basins, covering an exploration area of 285,000 sq km, were tested by 214 wells, an exploration drilling density of 1 well per 1332 sq km. Considering the 111 wells spudded in the 29,000 sq km of the producing Essaquira and Rharb basins, the well density of the remaining onshore basins does not exceed 1 well per 2485 sq km.
The offshore sedimentary basins, under a water depth not exceeding 200 m, cover an exploration area of 132,000 sq km. The total number of wells drilled, so far, is 28, an exploration density of one well per 4712 sq km. 11 of these wells did not reach their objectives since 6 encountered technical problems and 5 were spudded off structure. The density is subsequently reduced to one well per 6950 sq km. 13 out of the 28 wells drilled are in the Tarfaya-Ifni area where a discovery of heavy oil and important light oil shows were recorded.
The remaining offshore exploration areas (117,000 sq km) are tested by only 16 wells, that is a drilling density not exceeding one well per 7310 sq km.
The most important oil and gas fields currently in production are the Essaouira Basin on the coast producing oil and natural gas, and the Gharb Basin in the north of the country producing natural gas. A considerable gas field has also been discovered at Meskala just north of Essaouira. The national (upstream) oil company, Office Nationale de Recherches et d’ Exploitations Pétrolières (ONAREP), plans to develop this field and to sell the gas to the Office National de l’Electricité (ONE) which will install a 2.25MW turbine power station linked to its national grid on the site.
The companies currently involved in exploration and production activity in Morocco are Ashland – Santa Fe which is engaged in exploration work in the offshore area off the port of Agadir, and the Société Chérifienne des Pétroles which is involved in exploration and production in the Essaouira and Gharb Basins.
Lasmo has been awarded an initial, one-year prospecting licence to examine a block covering 7,000 sq.km. in the Essaouira region.
The Ministry of Energy & Mining and the Office National de Recherches et d’Exploitations Pétrolières (ONAREP) have recently announced the extensive hydrocarbon exploration and production opportunities on offer to the international oil industry. With proposed changes to the Hydrocarbon Law in 2000, the potential prospects both on and offshore are extremely attractive to foreign investors.
Downstream
The downstream oil industry of Morocco is well developed. The country has 2 oil refineries with a total refining capacity of 150,000 barrels per day. The Société Anonyme Marocaine de l’Industriele Raffinage (Samir) Refinery is a 125,000 b/d facility at the port of Mohammedia and the Société Chérifiennedes Pétroles (SCP) is a 25 000 b/d plant at Sidi Kacem.
Since Morocco’s domestic energy resources are not sufficient to satisfy local demand, it is required to import up to 90% of its energy needs. Thegovernment is encouraging an increase in the use of the country’s coal depositsas an energy source and of hydroelectric power. However, it is still an importerof some 6 million tons of crude oil.
Distribution and marketing of fuels and lubricants products is carried out by a number of companies.
| Company | Market share |
| Shell Maroc | 20% |
| Afriquia | 19% |
| Total Maroc | 18.5% |
| CMH | 10.5% |
| ExxonMobil | 10% |
| Somepi | 9% |
| Petrom | 6% |
| Others | 7% |
French company Vitogaz is building an LPG import terminal and tank farm near Casablanca with a capacity of 40,000 ton pa. Somas, which is owned by Elf, Afriquia, Shell, Total and Sodipi has an underground gas tank farm at Sidi Larbi with a capacity of 110,000 tons.
Morocco is progressing with plans to privatise its energy sector. The government is currently in the process of privatising the country’s two refineries. In 1993 seven product distribution networks were sold to Mobil, Shell and Total. Total Maroc, now 100% owned by Total Outre Mer following its acquisition of the 50% stake previously held by the Société Nationale Des Produits Pétroliers (SNPP) has sales of one million tons per year including jet fuel, LPG, heavy fuel and lubes and holds 16% of the gasoline market with a network of 300 service stations. Other companies privatised are the Société Marocaine des Hydrocarbures (CMH), and Dragon Gaz (LPG), acquired by the Italian firm Dragofina.
