Amina Benkhadra: Investments are below the potential of Moroccan oil

Giving interview to a French language daily newspaper which appeared Tuesday, April 2, Benkhadra complained that despite the potential presented by the Moroccan sedimentary basins, investment remains below the level expected and necessary for economic exploitation.

"The process of exploration and geological drilling is expensive," she said.

Concerning the development of shale gas extraction and oil shale Benkhadra noted at the level of immature oil and shale gas, especially shale, Morocco is full of large reserves of 50 billion barrels , placing it sixth in the world rankings.

She noted, however, that the characteristic of shale and complexity in terms of valuation, are now  such that Morocco has not yet reached the stage of industrial development.

"ONHYM has implemented a strategy since 2005 for the development of oil shale mainly focused on partnerships with oil companies and holding companies processes," noted Amina Benkhadra, recalling that between 2006 and 2007, Shell experimented, but they have not matured at the industrial level.

She added that  today, "three companies in the region of Tarfaya will be pilot testing to test results, while the Office has negotiations with both partners at Timhdite to give them areas where they will also do tests. "

For shale gas, Morocco is early in the process, explained Benkhadra.

"We have signed agreements with three companies that have permissionsfor exploration. In the exploration phase, some partners will be drilling and they can look at  the analysis of the first layers (300 m) with concrete information, "she added.

In the area of hydrocarbons, she recalled that the Board has put in place a strategy for several years to develop the knowledge of Moroccan subsoil. This is the code of Moroccan oil, enacted in 1999-2000, which offers many favorable conditions for investors.

Benkhadra noted that today, the Board has agreements with 31 companies, either through recognition contracts or  exploration permits.

"TheMoroccan geology is very favorable. Everyone agrees that this is an under-explored area despite efforts over the past decades, "lamented the manager who said that the average of recent years shows that the partners have invested between 600 million dirhams (MDH) and 1.2 billion dirhams per year, while the state through ONHYM invests only between 60 and 70 million dirhams a year.

In this regard, Benkhadra said the challenge is to maintain the interest of companies in Morocco and to push them to drill more, noting that the decision to drill is  an extremely complex process of evaluation.

She recalled, in this context, for the Atlantic offshore, considered  ahigh potential region, the first deepwater drilling was made in 2005 by Shell, with a cost of $ 25 million for each drill.

Regarding the same drilling in 2009, by Repsol at Tanger-Larache, it cost $ 80 million. Today, the forecast for wells that will be made in 2014 are 100 to 110 million, she said.

Costs increase dramatically. Before moving on to drilling at 100 million,the pros and conshave to be weighed. We are mobilized to further increase the level of investment.

As for the attraction of oil companies by the Office, she noted that similarities exist between some Moroccan basins with production areas including the Gulf of Mexico and off the coast of Nova Scotia, noting that Morocco has potential, as gas discoveries have been made off Tanger-Larache and east of Morocco (Tamdrara).

Regarding the development of national expertise, Benkhadra said that Morocco has geo-scientific teams of  experts in the field of geology and  seismic data processing. When it comes to some advanced techniques, the Agency uses the service providers.

Benkhadra also indicated that 2013 exploration programs in the field of oil will continue, noting that there are areas on which ONHYM teams are working  and a dozen drilling rigs are also provided with seismic campaigns.