The Ireland and UK focused oil and gas exploration, development and production company Europa Oil & Gas Plc said it has landed a high impact new venture offshore Morocco, boosting the country’s drive to launch viable upstream projects that would help the North Africa nation meet its fast-increasing energy demands and further its journey toward energy security.
Europa announced this week it has been awarded an eight-year exploration permit, the Inezgane Offshore Permit, which lies in water depths of between 600 and 2,000 meters, covering an area of 11,228 square kilometers in the Agadir Basin and where the company says it will, in its subsequent drilling program, focus on “Cretaceous fan sand play, a prolific producer in West Africa.”
The company, which had indicated as early as last January that it was finalizing discussions with the National Office of Hydrocarbons and Mines (ONHYM) for a petroleum agreement, said “a formal letter of award from the ONHYM is expected shortly and, following confirmation of its acceptance, Europa will be assigned a 75% interest in, and operatorship of, the Licence with ONHYM holding the remaining 25% interest.”
“Europa has identified that the key elements required for a working hydrocarbon system, namely source, reservoir and seal, are all present in the Licence area,” the company said in a statement on Wednesday.
Europa has also said it has identified “a number of large structural traps located on the edges and above salt diapirs throughout the permit area.”
The Inezgane Permit, Europa said previously, “is an exciting opportunity to acquire acreage which, in terms of ‘company-making’ potential, is similar in scale to our offshore Ireland portfolio.”
For the first two years of the permit period, Europa will reprocess nearly 1,300 sq km of 3D seismic data and carry out additional technical surveys before committing to drilling one exploration well in the second phase or to relinquish the licence.
“Europa plans to mature several of these stacked prospects, which each have the potential to hold over 250 million barrels of oil, to drillable status with a view to attracting one or more farminees to drill an exploration well in the second phase of the licence,” the company said.
For Europa CEO, Hugh Mackay, the new venture in Morocco “represents an obvious new country for Europa’s technical team to deploy the first-rate knowledge and understanding of Lower Cretaceous plays it has gained through its work across our industry-leading licence position in offshore Ireland.”
“In terms of our investment criteria, Morocco ticks all the boxes: a stable country with a transparent business environment; excellent fiscal terms; and low political and regulatory risk,” said Mackay.
“We very much look forward to working with ONHYM in the initial phase of the Licence to mature prospects, which have the potential to hold up to 250MMBO each, to drillable status over the next two years,” added Mackay.
This offshore permit award for Europa does not only provide an opportunity for the company to build on the multiple work streams currently underway concurrently in Ireland and UK but also coincides with the Europa’s conclusion of its strategic review that “identified areas and basins where the expertise of our technical team could be applied to replicate the excellent work carried out in our offshore Ireland licences.”
Although Morocco has lately been famed for having underexplored proven oil reserves, favorable government guidelines for oil and gas exploration, supportive and stimulating regulatory framework and competitive fiscal terms, upstream progress has been slow with only three of the 10 previously drilled wells penetrating a complete lower cretaceous section.
Europa’s entry in Morocco’s offshore comes barely six months after Italian energy giant Eni signed a farm-out agreement with Qatar Petroleum to enable the Qatar State owned petroleum company acquire a 30% participating interest in Tarfaya Offshore Shallow Petroleum Agreement, which comprise 12 exploration blocks in the offshore of Morocco.
The Tarfaya Area is located in the southern part of the Moroccan offshore shallow waters in water depth up to 1,000 meters and covers a total area of approximately 23,900 square kilometers.
These two upstream developments and previous ones offshore Morocco’s reinforces the country’s image of an emerging hydrocarbon market in the midst of major producers of Algeria, Libya and Egypt.