Morocco Extends Exploration Licensing
Morocco's first oil exploration licensing round has been informally prolonged until potential bidders have had adequate time to study seismic data. The licensing round was officially closed on June 15 after an earlier extension from April 2001. This is Morocco’s first experience with a bidding round and there was under pressure to make it quick and set a deadline. However, the companies who were looking at the seismic package did not have enough time to look at it properly.
Eight blocks were on offer in the Rabat-Safi Atlantic offshore area. Operators already in Morocco talk of the challenging structures and high-risk exploration work in the under-explored North African country. With fierce competition from neighboring Algeria and Libya, which have well-established exploration records, Morocco is keen to ensure it puts itself on that map. Its hopes were raised by a discovery last year by on the Lone Star prospect.
It has passed a hydrocarbon law offering attractive terms to existing and potential newcomers, and has managed to attract oil major Royal Dutch Shell, among other mainly independent U.S. and Canadian firms, to take up more tracts.
State share was reduced to a maximum 25 percent in exploration permits and exploitation concessions, and royalty was set at 10 percent for onshore and shallow offshore tracts with exemption for the first 300,000 tonnes of crude produced.
Rates fell to seven percent for deep offshore blocks over 200 meters in depth with an exemption for the first 500,000 tonnes produced. Gas royalty ranged between 3.5-5 per cent. Companies were also exempt from corporate tax from the date of starting production for a consecutive 10 years.
Energy Africa, operator of the Tiznit block with 31.87 percent, and working alongside Petronas, ONAREP and Taurus, has just completed 14,600 kilometers 3D seismic study and expects to spend some time interpreting the data.