According to GlobalData, a data and analytics company, if Morocco makes final investment decisions (FIDs) this year, two major gas projects in Morocco, would be on the verge of becoming operational and could lead to the independence of the Kingdom or at least reduce its dependence on coal and expensive gas imports and more particularly on Algeria.
The country, GlobalData adds, has nearly 700 billion cubic feet of reserves in announced developments. Morocco, even if it is not a major producer and imports most of its gas, could therefore add 70 Mcf of natural gas to the country’s energy mix over the next five years.
Santiago Varela, Upstream Analyst at GlobalData, comments: “ Productive growth is expected to materialize with the launch of the first phase of Tendrara, which plans to deliver gas volumes by mid-2022 with a development price below $ 5 / mcf. Anchovies, discovered in 2009, is expected to produce the first gas in 2024 and will be by far the largest gas development undertaken in Morocco to date. For both projects, the major obstacle is to obtain adequate financing, because neither of the two operators has sufficient funds to undertake these developments on their own. “.
The operator Chariot Oil & Gas has struggled in recent years to convince investors to support the financing of Anchovy development. However, in the past year, the company has successfully reprocessed seismic data which led to a tcf upgrade of recoverable resources. In addition, the company announced the expression of interest of Africa Finance Corporation and a multinational investment bank to finance the project as well as a memorandum of understanding for gas sales with the Moroccan Ministry of energy according to GlobalData.
These latest developments are bringing Morocco closer and closer to unlocking its largest gas field, and a final investment decision is about to be made this year. Santiago further continued: “ Morocco has failed to develop its main gas discoveries to date, mainly due to the fact that oil has been the preferred resource over gas. But now, that the focus has been on gas, an attractive fiscal framework and strong domestic demand, international operators are making great efforts to develop the country’s resources. “.
However, although the economics of the Tendrara and Anchovy projects seem tempting, it is not yet clear whether the current operators will be able to finalize the financing necessary to develop these fields despite the international operators pushing hard to develop the resources of the country.
Securing capital is the last obstacle on the way to unlocking Morocco’s gas resources, says GlobalData, whose mission is to help its customers decode the future to be more efficient and innovative in a given range of industries, including healthcare, consumer, retail, finance, technology and professional services sectors.