FASTNET OIL & GAS British Businessmen Will Miss Out on First Ever Moroccan Gas Discovery
Morocco is enjoying an oil and gas drilling bonanza, with 27 wells planned this year, a senior energy official said on Sunday, amid growing foreign interest in the kingdom's potential offshore reserves.
Oil and gas expert Malcolm Graham-Wood says that it's expected to be "significant".
I had a few calls about Longreach yesterday and whilst they never got a London quote which would have been wise on so may levels, the discovery onshore Morocco is an interesting read through for a number of players in-country. The fans of Fastnet are probably most happy to see a decent gas discovery but I see that they are going again offshore after the recent duster where I hear that the well may not have been quite as dry as it seemed…
Among oil explorers, Credit Suisse sees onshore African explorers and Iraq-Kurdish based groups appealing to Middle East and Asian national oil companies.
Longreach Oil & Gas, a London-headquartered company, has announced the first onshore gas find in Morocco.
Few details have been released as to the size of the discovery, but oil and gas expert Malcolm Graham-Wood says that it's expected to be "significant".
The landmark discovery for Morocco is expected to be the first of many, says Graham-Wood, with investors scrambling to get involved with explorers drilling in the area.
However, he says that the discovery for Longreach could be viewed with regret by those who started the company.
The company was, until recently, owned by Bryan Benitz and run by his son Andrew.
Short of cash, they had approached investors in Canada to provide the capital needed to push exploration efforts in Morocco over the line.
Even late last year, Andrew Benitz – then CEO – told investors that there will be "exciting times for the company in 2014 amid tremendous exploration effort" in Morocco.
One month later, the pair were ousted from the top table at Longreach.
In July 2011, the company announced a $10.1m (£6m, €7.3m) equity investment in Canada which would "allow us to proceed in securing the Sidi Moktar licenses".
Sidi Moktar is one of the sites in which Longreach is actively pursuing gas discoveries.
Then in December last year, Dennis Sharp and Cam Deacon, currently the CEO and non-executive director, respectively, sought the removal of the Bentiz family from the board, saying:
"The concerned shareholders believe that if the board changes are implemented, the newly-constituted board will collectively possess the depth of experience required to better position Longreach to achieve its full potential."
Graham-Wood describes the move as "very harsh", saying that in his view the company should have maintained its London listing and sought funding in the UK, rather than Canada.
With the pressure on the gas market stemming from uncertainty around Russian supply into Europe, gas discoveries automatically become more valuable.
It's thought that the main buyer of Longreach's gas will be the Moroccan government, as it seeks to limit its chronic dependence on energy imports.
The company, says our source, "will be able to sell as much as it finds".
Longreach failed to respond to further comment.
Morocco - Maersk Discoverer. Kosmos And Fastnet Oil & gas - to drill the 2nd well on the block
Morocco is enjoying an oil and gas drilling bonanza, with 27 wells planned this year, a senior energy official said on Wednesday, amid growing foreign interest in the kingdom's potential offshore reserves.
"In 2013 and 2014 we have witnessed an unprecedented period of growth" in upstream activity, Amina Benkhadra, the head of Morocco's Office of Hydrocarbons and Mining (ONHYM), told an energy conference in Marrakesh on Wednesday.
This includes a vast amount of seismic data being gathered, and 27 wells being drilled this year in the onshore and offshore, compared with four in 2013, she told hundreds of industry representatives.
The North African country has made no significant discoveries to date, importing virtually all its energy needs and battling to reduce its unaffordable oil subsidies.
But improved offshore drilling technology, a benign investment climate and similar geology in prospective regions elsewhere in the Atlantic, like Canada's Nova Scotia, are encouraging companies to search for Morocco's potential subsea riches, oil executives say.
There are now 34 oil companies operating on 131 exploration and five reconnaissance permits, Benkhadra said, when 15 years ago the country had just a handful of foreign partners exploring for oil and gas.
Reflecting the industry's growing interest in Morocco and boosting the government's hopes, Chevron and BP arrived last year, joining the two other major players in the upstream, Repsol and Total.
Chevron is due to start seismic shooting next week on acreage it acquired off the coast of Agadir, while drilling kicked off in March at one of the three deepwater exploration blocks that BP farmed into.
Other smaller oil firms active in the exploration frontier country include British-based explorers Cairn Energy and Gulfsands Petroleum, Turkey's Genel Energy and Texas-based Kosmos Energy, which found the Jubilee oil field off Ghana.
Kosmos, which sold stakes to BP in three of its offshore blocks, also has acreage in the waters of the disputed Western Sahara, where it plans to sink a well later this year or in early 2015, despite objections by the pro-independence Polisario Front.
The drilling conducted in March on its Foum Assaka block, which was unsuccessful, took place in water depths of 2,000 metres, the deepest offshore well so far drilled in Morocco.
But Kosmos has already hired and contracted the Maersk Discoverer, a sixth generation semi-submersible rig, to drill the 2nd well on the block having learnt much from the first drill on the block, it is expected to start immininently as the rig is still moored offshore Morroco.
Carl Atallah, the country manager of Chevron, which acquired three deepwater concessions last year, mostly in depths of 3-4,000 metres, says part of their appeal is that this area has not been explored before
Dublin-based explorer Fastnet Oil & Gas has said that interest in its Celtic Sea assets has swelled since the second half of last year.
Fastnet, which had been in talks with smaller firms regarding its Irish operations last year, hopes to name a development partner for its Celtic Sea portfolio before the halfway point of 2014.
Offshore Morocco licence in which the company owns a 12.5% stake and on its 100%-owned onshore Morocco interests which, if successful, could see the Irish firm become the largest gas producer in the north African country.
Fastnet’s ultimate goal is to sell each of its interests, upon proof of commerciality, and return the proceeds to shareholders. If all goes to plan the firm could successfully sell out of Morocco next year before focusing on the development and eventual sale of its Irish portfolio.
Initial interpretation of Fastnet Oil & Gas’ processed 3D seismic surveys over its Mizzen and Deep Kinsale acreage offshore Ireland has revealed 22 structures in the Upper Jurassic to Lower Cretaceous interval.
The largest structure, spanning an area of 110 sq km (42.5 sq mi), underlies the Kinsale gas field in the Celtic Sea.
In Mizzen, there appear to be two large structures covering respectively 45 and 63 sq km (17.4 and 24.3 sq mi), and four seismic amplitude-driven structural leads that could be gas anomalies.
In addition, there are numerous potential stratigraphic traps in the Lower Cretaceous and further deep-seated structural leads in the Triassic and Jurassic, Fastnet says, which last year’s 3D seismic campaign has better defined than the legacy 2D seismic.
The company has opened a data room to potential farm-in partners. |
