Morocco: Australians eye potential
23 September 2011 – Africa-Energy.com (Web)
Perth-based Tangiers Petroleum plans to list on London's Alternative Investment Market in late November or early December as it seeks to line up partners for its offshore Morocco project. The Australian minnow believes its offshore Tarfaya Block has billion barrel oil potential from a range of plays, and has opened data rooms to try to attract farm-in partners.
Aware of the junior market's need for newsflow, the company has set itself a tough timetable, looking for a share listing and a farm-out by year-end, seismic acquisition in Australia and Morocco in early 2012, then four wells (two in Morocco and two in Australia) by end-2012. "Success is about putting holes in the ground," said Chairman Mark Ceglinski. "The key is getting the right farm-in partners who are as motivated as we are."
The well locations in Morocco will be determined by the farm-in partner, but Ceglinski said Tangiers had identified three promising locations. Tangiers said on 7 September that the latest 2D seismic interpretation over the Zeus prospect had produced a significantly larger structural closure than previously mapped. The broad, four-way dip closure, located at the Top Jurassic horizon, is estimated to cover an area of 1,030km2, making it bigger than each of Tangiers' four previously identified prospects – Trident,TMA, Assaka, and La Dam.
"We'd like to be carried on the cost of the wells and seismic, and we think that because of the size and quality of the prospects, that'll happen," Ceglinski said.
Shell carried out exploration along the African coast in 1992, focusing on Jurassic carbonates. Wells on the block had oil stains, and the undeveloped Cap Juby oil discovery is close to the block's south-west border. San Leon Energy has an oil shale project immediately onshore from the block.
Morocco has not had the exploration success of its neighbours to the east or south-west, but Ceglinski highlighted the area's drilling density, pointing out that if fewer wells are drilled, there will inevitably be fewer discoveries. He said the Moroccan government was very helpful to investors and offered favourable fiscal terms, making the economics easy to justify.
Also present offshore is Spain's Repsol YPF, which has the Tangier-Larache blocks, and Kosmos Energy, which recently signed two agreements with the Office National des Hydrocarbures et des Mines for the Cap Boujdour Block offshore the disputed Western Sahara and the Foum Assaka Block further north.
Repsol is reviewing its options after the sub-commercial Anchois gas discovery was followed by two dry wells, Deep Thon and Merou, and will probably extend the licence. Failure to prove up more gas was a disappointment for the government, which had been talking up the potential for a significant gas find (AE 199/9). Major exploration work offshore the Western Sahara will be limited until the intractable dispute over the territory's sovereignty is resolved.
Onshore player Circle Oil expects to complete construction of a new 8 inch pipeline capable of delivering up to 23.5mcf/d by year-end, enabling it to increase production from its Rharb Basin acreage to supply potential customers in Kenitra, north of Rabat. Ceglinski said he expected an acceleration of offshore drilling in the next couple of years.
While Morocco is an oil play, Tangiers also has strong LNG potential in Northern Australia, which is rapidly becoming a new hub for liquefied natural gas. "LNG is the new black post- Fukushima," Ceglinski said.
Ceglinski, an accountant by training with a background in resources-based deal-making, said there were a lot of "cashed- up corporates" looking to pick up assets. One of these is fellow Australian Range Resources, which on 2 September announced it was investing A$2m ($2.07m) in Tangiers Petroleum. This gives Range a 5.7% stake in Tangiers, making it the company's biggest shareholder. Ceglinski said he had known members of the board for a long time. "They're prepared to take higher risk punts than I am," he said, in a reference to Range's Puntland holding, adding that the company's investment in Tangiers "gives them exposure to offshore, very high impact assets".
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