The possible new discovery of oil off the Moroccan coast of Inezgane has been the subject of media reports in recent days. Supposedly, the new oil field would have reserves of approximately 1 billion barrels of oil. The problem is that this discovery, according to the Association of Spanish Petroleum Geologists and Geophysicists (AGGEP), is false and dates from 2022.
The announcement was made by the British company Europa & Oil, which owns 75 % of the exploitation and the remaining 25 % belongs to Morocco. Moreover, according to their studies, the area has potential, but the quality of the crude oil must be checked and an investment of time and money in infrastructures must be made.
It is estimated that this field has reserves of approximately 1 billion tonnes and a potential exploitation of 11,220 square kilometres along the coasts of Tarfaya, Sidi Ifni and Tan-Tan. Although some countries, such as China, are trying to abandon the use of oil because of pollution, oil is still considered a strategic raw material.
A known site
Jorge Navarro, vice-president of the Association of Spanish Petroleum Geologists and Geophysicists, explained that the announcement of the discovery of the field is not new, as it dates back to 2022, something that had already been clarified by the AGGEP at the time. All this had originated from a misinterpretation of prospective resource figures provided by Europa Oil & Gas.
The document published by the British company aims to find a partner who can finance the drilling of the exploration well on the Inezgane licence. In addition, it detailed the undiscovered resource volumes for the five prospects which, according to this assessment, had the highest potential.
In relation to exploration, Navarro mentions that to confirm such a high volume of oil would have required drilling all five prospects, and this, although theoretically possible, requires a large investment and a high level of exploration success.
He further states: ‘The sum of the Pmean volumes from the five primary target prospects amounts to 1.67 billion barrels of oil equivalent per day (mmboe)’. This is higher than the figure reported in the media, but it cannot be considered a new discovery, so if this amount of oil were to be approved one day, it is estimated that it would cover Spain’s needs for at least three years.
However, there is another problem with this: the supposed discovery only has oil in it according to the data in a technical evaluation document of an exploration permit, but not in the subsoil.
Moreover, no oil has been extracted from the area to date, and the British company even relinquished the Inezgane permit in November 2022 after failing to find a partner to finance the project. In relation to this, Navarro explains: ‘This type of document, known in oil jargon as a “farm-out”, is used to offer the sale of a stake in a permit to other companies’.
In the same area, but in Spanish territory, potential deposits have also been found, but Spain, by committing to only promote clean energies that do not contribute to the greenhouse effect, as shown by Law 7/2021 on Climate Change and Energy Transition, prohibits new exploration projects in Spanish territory and limits current exploitation until 2042.
It is worth noting that Spain, since 2014, has only processed two permits aimed at the search for hydrocarbons of an autonomous type in the regions of Aragon and Asturias, of the rest it has not carried out explorations in search of oil, as reported by the Ministry of Transition.
Morocco’s oil sector
In terms of Morocco’s Gross Domestic Product (GDP), if this discovery is confirmed, the field could be worth $586.4 billion, almost five times more than Morocco’s GDP.
This discovery, if true, would have a beneficial economic impact for Morocco, which is undergoing rapid industrialisation due to the arrival of electric and combustion car factories.
In addition, Morocco’s oil sector will undergo a significant transformation, with the introduction of a new market system that promises to revolutionise the industry’s operations and governance. This initiative, scheduled for implementation in 2025, aims to improve transparency, streamline processes and raise the overall efficiency of the country’s vital energy sector.
This new system seeks to implement a standardised and digitised marking process, as the government aims to bring about a paradigm shift, ensuring a more organised and transparent environment for all stakeholders.
The system focuses on the objective of establishing a robust and reliable framework for the oil sector. In terms of oil production, Morocco, in 2022, exported $47.5 billion worth of crude oil, ranking it as the 83rd largest exporter in the world, with its main clients being South Korea, the Netherlands and Namibia, according to data from The Observatory of Economic Complexity.
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