The agreement comprises four licenses covering 6,540 square kilometers at a sea depth of 300 to 3,000 meters.
"We signed an investigation contract for the North-West Safi license in April 2004. During autumn last year 1,000 line-kilometers of 2D seismic was collected. Supplemented with complementary geological studies the data confirms possible oil and gas deposits," says Hans-Helmut Berchelmann, head of the New Areas unit in Business Development.
By acquiring exploration area, outside bid rounds, in countries with favorable tax conditions, Hydro can build a varied exploration portfolio with limited risk, and at the same time exert control through operatorships.
Further collecting of seismic and interpretation of exploration models are now being planned. This work will form the basis for a decision about potential exploration drilling or possible farm-outs or swaps.
In these areas Hydro's considerable offshore competence – especially from the Nova Scotian continental shelf, which resembles the NW-Safi region – will be useful. The deepwater exploration areas off the Moroccan coast are considered as little explored. Lately, only three wells have been drilled.
"Encouraging geological information from new 2D seismic and a systematic evaluation will now be pursued. Preparations for a major 3D seismic survey have already started," says Berchelmann.
"We are happy that Dana Petroleum joined the partnership on May 17th. This company has considerable knowledge about this region and will strengthen the project. A decision regarding possible drilling operations is expected early in 2007.
"Despite that limited deepwater drilling further south has not been successful so far, further exploration efforts are justified to assess the potential on the Moroccan continental shelf," says Hans-Helmut Berchelmann.
Partners in the NW-Safi license are Hydro (operator) 48.75 percent; Dana Petroleum 26.25 percent; and ONAREP 25.00 percent
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