British companies strike deal on Moroccan offshore gas licences

Alamy/Karen Hovsepyan

• Chariot Energy and Energean split holdings
• Morocco retains 25% stakes
• Part of drive for energy independence

Two British energy companies have completed a deal over stakes in two offshore Moroccan gas licences. 

The transaction between Chariot Energy and Energean, announced Wednesday, involves the Lixus and Rissana offshore licences.

The Lixus Offshore licence covers an area of sea north of Rabat of approximately 1,800 sq km, with water depths ranging from the coastline to 850m. The Rissana Offshore licence covers 8,500 sq km, surrounding the boundaries of the Lixus Offshore licence.

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Under the terms of the agreement, Energean, a London-based FTSE 250 company specialising in hydrocarbon exploration and production with a market capitalisation of £1.8 billion, will assume the role of operator for both licences. It will hold a 45 percent interest in Lixus and 37.5 percent of Rissana.

Chariot Energy, which has operations in seven African countries including South Africa and Mauritania, retains a 30 percent stake in Lixus and a 37.5 percent slice of Rissana.

Morocco’s National Office of Hydrocarbons and Mines has a 25 percent share in each.

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The deal includes a $10 million upfront cash payment from Energean to Chariot and a contract with Stena Drilling for the deployment of the Stena Forth drillship.

The drilling campaign is scheduled for the third quarter of 2024 at the Anchois-East site within the Lixus licence. It aims to appraise existing gas reserves and probe new resources, potentially elevating the Anchois project’s gas reserves above 1 trillion cubic feet. 

Chariot’s CEO Adonis Pouroulis said there was also the option for a second drilling well. 

Leila Benali, Morocco’s minister of energy transition and sustainable development, said the investments would contribute to the monetisation of the state’s resources. 

The partnership is seen as a significant step in Morocco’s efforts to increase its energy independence. 

The kingdom has been importing gas via the Maghreb-Europe gas pipeline from Spain, after the deterioration of relations with its neighbour Algeria over Western Sahara. 

Despite its ambitious renewable energy goals Morocco has identified natural gas as a critical component of its energy mix. It claims it is necessary for overcoming what is called “renewable energy intermittency”, the fluctuating nature of sources such as wind and solar power generation and enabling its transition to a hydrogen economy.

The country, which has a population of 37 million, has adopted an aggressive renewables strategy in part because it is poor in hydrocarbon resources.

Some 42 percent of Morocco’s power generation now comes from renewables, but it still relies heavily on imported oil, gas, and coal. Its annual consumption of natural gas is estimated at around 1 billion cubic metres.

The renewables will require a $9 billion investment, while the government intends to commit another $4 billion to gas infrastructure. 

Morocco also plans to launch a green hydrogen initiative to attract investment.