Serica Energy and Island Oil and Gas have signed with the Office National des Hydrocarbures et des Mines ("ONHYM") two Petroleum Agreements for the contiguous areas of Sidi Moussa Offshore ("Sidi Moussa") and Foum Draa Offshore ("Foum Draa").
The Agreements are valid for up to 8 years and together cover a total area of approximately 12,700 square kilometers in the sparsely explored Agadir Basin, about 100 kilometers south west of the Moroccan city of Agadir. The work programmes during the first 30 month period of the Foum Draa agreement and first 18 month period of the Sidi Moussa agreement comprise seismic reprocessing and geological studies.
The areas of Sidi Moussa and Foum Draa are covered by over 5,200 square kilometers of modern 3D seismic data and over 2,000 kilometers of 2D seismic data. A drill or drop decision will be made at the end of the initial phases of the Agreements.
The Agadir Basin lies offshore in the Atlantic Margin and is geologically analogous to and on trend with the oil producing salt basins of West Africa. Based on the extensive grid of existing seismic data, over 40 undrilled prospects and leads were identified in Sidi Moussa and Foum Draa by previous operators. The areas extend from the Moroccan coastline into water depths reaching a maximum of 2,000 meters.
The Joint Venture Partners in the Exploration Permits are IIEM (50%), the designated operator, Serica Energy plc (25%) and ONHYM (25%).
Morocco has an attractive fiscal regime relative to other North and West African oil and gas producing countries: State Participation on production of up to 25%; 10% royalty on oil production (first 300,000 tonnes of production exempt) and 5% royalty on gas production (first 300 million cubic meters exempt). Corporation tax of 35% is only payable after a 10 year tax holiday.
Serica CEO Paul Elis said, "Following our recent oil discovery in the Atlantic Margin offshore Ireland, we are delighted to have secured a large and underexplored area of the Atlantic Margin offshore Morocco. With excellent fiscal terms, comprensive existing 3D and 2D seismic coverage, prospects already mapped by previous operators and several play types, I am confident that Sidi Moussa and Foum Draa will respond to Serica's use of leading edge seismic technology and will provide us with some exciting exploration drilling opportunities."
Paul Griffiths, Island's CEO, added, "Island is very pleased to have been awarded a substantial exploration asset, covering a sparsely explored potential extension of the West African Atlantic Margin oil play, on favorable terms. Island now holds exploration permits covering a gross area of 48,331 sq. kms. demonstrating that Morocco forms a key component in our future business development strategy. Island is delighted to be in joint venture partnership with Serica Energy plc in these Explorations Permits, particularly as Serica has recently enjoyed a significant exploration success in the Atlantic Margin offshore Ireland."
Mme Benkhadra, the Minister of Energy, Mines, Water and Environment of Morocco, commented, "I am delighted that Island Oil & Gas plc and Serica Energy plc, a new entrant in Morocco, have been awarded Exploration Permits to explore for oil and gas in an important and highly prospective area offshore Morocco. The award of these Permits further demonstrates the success of our 'open-door' policy in relation to the promotion of the large number of opportunities for exploration both onshore and offshore Morocco."
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