LONDON: Oil companies are stepping up exploration in Morocco, attracted by its stability relative to other parts of North Africa and encouraged by advances in geology and technology that indicate its potential for reserves offshore.
Independent explorers have snapped up rights to explore offshore blocks over the past 18 months, and they are now making way for big players seeking acreage in a nation once dismissed as the energy-poor neighbor of OPEC members Algeria and Libya.
Damon Neaves, managing director of Australia’s Pura Vida Energy, said 10 exploration wells would be drilled off Morocco in the next 12 to 18 months, compared with only nine since 1990, according to analysts’ estimates.
“That represents an investment of $500 million to $1 billion, and that is a big show of confidence from the industry,” Neaves said.
“It is still a frontier region and is under-explored compared to other parts of the world.”
BP is the latest oil major to enter Morocco, announcing a deal with Kosmos Energy this week to take a share in three offshore blocks.
Drilling will begin next year.
Britain’s Cairn Energy said it would shortly begin drilling off the Moroccan coast.
They follow Chevron, the second-largest US oil company, which said in January it had taken up three offshore blocks.
By contrast, some oil firms have recently turned away from Libya due to disappointing finds and supply disruptions and from Algeria, where security concerns have mounted since an attack on a gas plant this year killed 40 workers.
“North Africa and particularly Libya and Algeria are looking less appealing than they have done for five years,” Geoff Porter, founder of North Africa Risk Consulting, said.
“Conversely, Morocco is a quiet hive of activity.”
Pura Vida this year found a partner for its Mazagan block. Drilling is to begin next year on the Toubkal field, which it hopes could hold over 1 billion barrels of oil.
Excitement over Morocco has grown as technology has helped firms to discover new oil and gas fields over the past decade in regions that were formerly overlooked.
Huge finds deep under the seabed off Brazil’s coastline have raised hopes that similar hydrocarbon formations lie unexploited off the African coast. Early finds offshore countries including Ghana and Angola have further piqued the interest of majors with deep-water experience.
“We look at the Atlantic margin as a whole,” BP spokesman Robert Wine said. “If you look at Angola and Namibia then you can see a geological mirror to Brazil and Uruguay ... Morocco is obviously a bit further north.”
Oil companies also are encouraged by Morocco’s relatively attractive fiscal terms and its infrastructure, including port and rail facilities.
That contrasts with Libya, which has some of the toughest terms in the business, and Algeria, which struggled to attract foreign bidders in its last licensing round.
“The fiscal terms in Morocco are as good as you’ll find anywhere in the world,” said Neaves. “If you compare a barrel of oil in the ground in Morocco, then it is worth more than it is just about anywhere in Africa.”
Significant finds could help ease political pressures on Morocco’s government as it raises fuel prices as part of reforms demanded by an International Monetary Fund program.
Morocco is one of the world’s most energy-poor countries, importing around 95 percent of its needs, according to the World Bank.
It has turned to Wall Street banks to hedge against oil price hikes, the Financial Times said this month.
The government also aims to attract investment in renewable power to help meet domestic electricity consumption that is rising by around 6 percent a year, so that any potential oil and gas output can be used to generate export revenue.
Such a strategy has been employed by Norway, a major energy exporter that uses dams to generate hydropower and provide most of its electricity.
Funds from the Middle East, Europe and the World Bank are being invested in projects such as the world’s largest concentrated solar power plant in Ouarzazate, in eastern Morocco.
“The plant is part of the Moroccan government’s Solar Plan ... This replaces the high-carbon, coal-fired electricity of the past and will create a new source of income for Morocco, as the plan calls for export of solar electricity to markets in Europe,” the World Bank said.
But there are potential pitfalls for those oil firms whose blocks fall in the disputed waters off the Western Sahara to the south of Morocco.
This tract of desert, home to phosphate deposits and potential offshore energy reserves, has been the focus of Africa’s longest-running territorial dispute, pitting the Moroccan government against the Polisario Front independence movement backed by Algeria.
Campaigners set up Western Sahara Resource Watch over a decade ago after Morocco awarded its first exploration licenses in disputed waters. WSRW says it wants oil firms to comply with a UN legal opinion from 2002 that calls for activities to respect the wishes and interests of the Western Sahara people.
It has in the past appealed to shareholders of firms operating in disputed areas to divest or halt exploration.
Analysts say most of the blocks snapped up so far are not in disputed waters and would face no legal or political challenge.
But it will take time to develop the energy sector, even if companies do strike oil.
“Morocco does look attractive, but they have not found any major oil and gas deposits yet. Algeria is already one of the largest suppliers of gas to Europe,” Charles Gurdon, managing director at Menas Consulting, said.
“Morocco is at least a decade away from anything like that, and that is even if they find it.”
Oil majors step up exploration in Morocco’s Atlantic waters
Oil majors step up exploration in Morocco’s Atlantic waters
Red Sea Global secures $1.5bn for AMAALA infrastructure project
JEDDAH: Red Sea Global has announced the financial closing of a multi-utility infrastructure development project for the AMAALA destination, totaling around $1.5 billion.
The initiative, led by a consortium including Electricite de France or the EDF Group and Abu Dhabi Future Energy Co., or Masdar, alongside their partners Korea East-West Power Co., or EWP, and SUEZ, is set to position AMAALA as a luxury wellness destination on the Red Sea coast of Saudi Arabia. It is expected to welcome its first guests in 2025.
The financial close was achieved with the support of local and international financial institutions, including First Abu Dhabi Bank, Emirates NBD, and Riyad Bank, as well as Saudi National Bank and Alinma Bank, according to a statement from RSG, adding that the milestone highlights the consortium’s dedication to realizing AMAALA’s promise of unparalleled luxury, sustainability, and cultural enrichment.
Group CEO of RSG, John Pagano, said that they have demonstrated that large-scale tourism destinations can be powered using 100 percent renewable energy while providing luxury experiences for guests and strong financial returns for partners.
“This agreement with EDF, Masdar, EWP, and SUEZ means that we are on track to making AMAALA our second destination powered by sunlight, day and night.”
This achievement comes after the awarding of a 25-year multi-utility concession agreement with RSG in September 2023, which includes an option for extension. The deal encompasses the financing, engineering, and development, as well as construction, operation, maintenance, and eventual transfer of a multi-utilities infrastructure facility to support the AMAALA destination, RSG clarified.
The facility includes a fully optimized and decarbonized off-grid renewable energy system designed to generate electricity from a 250-megawatt solar photovoltaic park, 700MWh battery energy storage, and transmission and distribution lines. Additionally, it features a desalination plant with a capacity of 37 million liters of drinking water per day and wastewater treatment plants to secure the necessary base load.
The project is expected to prevent nearly 350,000 tonnes of CO2e emissions annually compared to typical infrastructures of this nature. It will also serve as a pioneering infrastructure initiative, ushering in a new era of eco-friendly luxury tourism.
Masdar CEO Mohamed Jameel Al-Ramahi highlighted the project’s innovative solutions, including solar power, energy storage, and desalination systems.
Beatrice Buffon, vice president, international division, and chairwoman and CEO of EDF Renewables, described the financial close as a significant achievement enabled by RSG’s support and the dedication of their team and partners.
She added that this initiative sets new standards for the EDF Group and should be replicable in other geographies. She also highlighted that the off-grid project will supply 65,000 people with carbon-free electricity and uninterrupted water access.
Commenting on the announcement, Kim Young-Moon, CEO of EWP said: “We are excited to announce the financial close of our renewable energy project in Saudi Arabia, a significant step in our commitment to a sustainable future.”
Young-Moon added that the project will reduce carbon emissions, improve air quality, and create jobs, boosting local economic growth.
“As we aim to lead the global energy transition, this project is a key milestone, driving innovation in the renewable energy sector and advancing our ambitious goals,” the executive said.
Pierre Pauliac, chief operating officer and executive vice president at SUEZ, said: “We are delighted to contribute to this strategic project for the development of Saudi Arabia. SUEZ will be part of the construction of all the water utilities equipment. In addition, the group will operate during the 25 years the state-of-the-art desalination plant to secure AMALAA’s access to drinking water, as well as the water networks.”
AMAALA will go beyond sustainability to have a regenerative impact on the environment. By 2040, the project plans to achieve a 30 percent net conservation benefit for local ecosystems.
This will be accomplished by enhancing biologically diverse habitats such as mangroves, seagrass, corals, and land vegetation, promoting biodiversity while contributing to carbon sequestration, according to the statement.
Upon completion, the luxury destination will feature over 4,000 hotel rooms across 30 hotels, and 1,200 high-end residential villas, apartments, and estate homes. It will also host a vibrant community of more than 15,000 residents and workers, creating a dynamic and sustainable living environment.
Saudi-US bilateral accords ‘not that connected’ to Israel normalization
- Saudi FM rejects possibility of Kingdom recognizing Israel without establishment of Palestinian state
- Region's security as a whole is at risk if we do not address the rights of Palestinians, says Saudi FM
RIYADH: Saudi Arabia’s foreign minister said on Thursday that some of the bilateral agreements the kingdom has been negotiating with Washington are “not that tied” to the normalization of Saudi relations with Israel and are “moving ahead.”
He noted that potential US-Saudi agreements on trade and artificial intelligence are “not tied to any third parties” and “can progress probably quite quickly.”
“Some of the more significant defense cooperation agreements are much more complicated. We would certainly welcome the opportunity to finalize them before the end of the Biden administration's term, but that’s reliant on factors outside of our control,” he said.
“The other work streams are not that connected, and some of them are progressing quite quickly, and we hope to see movement forward.”
Ruling out the possibility of Saudi Arabia recognizing Israel without the establishment of a Palestinian state, Prince Faisal stated that this remains the only viable solution, regardless of Israel’s acceptance.
Speaking at the Future Investment Initiative summit in Riyadh, he emphasized that the creation of a Palestinian state is rooted in international law and UN resolutions.
“In reality, the establishment of a Palestinian state is not tied to whether or not Israel accepts it; it’s tied to the principles of international law,” he said. “The UN resolutions that led to the establishment of the state of Israel clearly envisioned a Palestinian state as well, so we need to make that happen.”
Prince Faisal asserted that normalization of Saudi-Israeli ties is “off the table” until there is a resolution regarding Palestinian statehood. He further highlighted the broader implications, stating, “The security of the region as a whole is at risk if we do not address the rights of the Palestinians.”
Addressing the ongoing crisis in Gaza, he called for a cease-fire, emphasizing the dangers of an Israeli overreaction following the events of October 7th. “We have seen the reality that Israel’s reaction and its continuing military assault have led to a humanitarian catastrophe,” he remarked. He described the situation in northern Gaza as dire, with blockades and no safe zones for civilians, stating, “That can only be described as a form of genocide. It is certainly against humanitarian law, and that is feeding a continuing cycle of violence.”
On the prospects of an immediate cease-fire, Prince Faisal expressed caution, saying, “I hope it’s the case that we can see a cease-fire in the immediate hours, in the immediate short term. I’m not sure that that’s the case. I don’t have the details.”
He acknowledged US efforts to facilitate negotiations, adding, “We are not part of the direct negotiations, but we certainly support the efforts that the US has undertaken to find a pathway to a ceasefire. I hope it comes to fruition.”
He noted that previous attempts at cease-fire negotiations had failed due to new demands from Israel. “In most of those instances where the talks collapsed, it has been because new requirements or demands were added on the part of Israel,” he explained.
Prince Faisal also addressed Saudi Arabia’s position on Lebanon, emphasizing a hands-off approach. “We have never fully disengaged. But we believe it’s up to the Lebanese politicians to seek a direction that puts Lebanon on the right track,” he stated.
He added: “It’s not up to any outside influence, any outside countries, or any outside powers to tell the Lebanese what to do or to influence the political process in Lebanon. That is our opinion.”
Regarding relations with Iran, Prince Faisal indicated that recent discussions focused on regional de-escalation. “I hope that Iran, like us, is working toward regional de-escalation on all fronts, not just in Lebanon. That’s very much the focus of my conversations with my Iranian counterpart,” he said. While he could not be “confident of anything that is in the control of other parties,” he emphasized the importance of avoiding further escalation.
“I have made it clear to our Iranian counterparts that it is important to avoid any further escalation. My sense is that they realize the risks of escalation and would prefer to avoid it. But, of course, they have their own strategic calculations.”
‘Blue tech’ needs private sector boost, says RSG official
RIYADH: Private sector firms need to lead the way and invest in so-called blue tech in order to protect the world’s oceans, according to a leading official at Red Sea Global.
Speaking to Arab News during the Future Investment Initiative in Riyadh, Raed Al-Basseet, environment and sustainability officer at the company, called on businesses to adopt innovative approaches that contribute to environmental preservation.
This includes blue tech — which refers to refers to any innovation made for the sea.
Al-Basseet also reaffirmed RSG’s commitment to sustainability — and how this reflects on the project’s return on investment.
He called on the private sector to take “the first steps” and invest in “cutting edge approaches to preserving the environment,” adding: “Enhancing the environment and … conservation is the right thing to do for the private sector, but also when we realize the first benefits out of that, and out of these initiatives, we will also have real return on investment as a developer, as a private sector, from that investment.”
Al-Basseet was keen to emphasis RSG’s focus on environmentalism, saying the company has “sustainability at its DNA.”
He added: “And that actually, from a practical sense, means that (in) all of our activities, master planning and development, design, construction, delivering on these projects, as well as operating these projects, sustainability is at the core of everything that we do.”
He emphasized that the long-term success of the projects relies on preserving natural assets, making sustainability integral to achieving favorable outcomes.
Highlighting key initiatives, Al-Basseet pointed out the company’s significant investment in blue tech, adding: “The investment in technology does require the support of a multitude of stakeholders. Private sector does have a role. Red Sea Global is very proud that they have in the
Al-Basseet also spoke about the company’s efforts in coral conservation, including supporting research that is happening now within the Red Sea.
Saudi-US bilateral accords ‘not that connected’ to Israel normalization
RIYADH: Saudi Arabia’s foreign minister said on Thursday that some of the bilateral agreements the kingdom has been negotiating with Washington are “not that tied” to the normalization of Saudi relations with Israel and are “moving ahead.”
He noted that potential US-Saudi agreements on trade and artificial intelligence are “not tied to any third parties” and “can progress probably quite quickly.”
“Some of the more significant defense cooperation agreements are much more complicated. We would certainly welcome the opportunity to finalize them before the end of the Biden administration's term, but that’s reliant on factors outside of our control,” he said.
“The other work streams are not that connected, and some of them are progressing quite quickly, and we hope to see movement forward.”
Ruling out the possibility of Saudi Arabia recognizing Israel without the establishment of a Palestinian state, Prince Faisal stated that this remains the only viable solution, regardless of Israel’s acceptance.
Speaking at the Future Investment Initiative summit in Riyadh, he emphasized that the creation of a Palestinian state is rooted in international law and UN resolutions.
“In reality, the establishment of a Palestinian state is not tied to whether or not Israel accepts it; it’s tied to the principles of international law,” he said. “The UN resolutions that led to the establishment of the state of Israel clearly envisioned a Palestinian state as well, so we need to make that happen.”
Prince Faisal asserted that normalization of Saudi-Israeli ties is “off the table” until there is a resolution regarding Palestinian statehood. He further highlighted the broader implications, stating, “The security of the region as a whole is at risk if we do not address the rights of the Palestinians.”
Addressing the ongoing crisis in Gaza, he called for a cease-fire, emphasizing the dangers of an Israeli overreaction following the events of October 7th. “We have seen the reality that Israel’s reaction and its continuing military assault have led to a humanitarian catastrophe,” he remarked. He described the situation in northern Gaza as dire, with blockades and no safe zones for civilians, stating, “That can only be described as a form of genocide. It is certainly against humanitarian law, and that is feeding a continuing cycle of violence.”
On the prospects of an immediate cease-fire, Prince Faisal expressed caution, saying, “I hope it’s the case that we can see a cease-fire in the immediate hours, in the immediate short term. I’m not sure that that’s the case. I don’t have the details.”
He acknowledged US efforts to facilitate negotiations, adding, “We are not part of the direct negotiations, but we certainly support the efforts that the US has undertaken to find a pathway to a ceasefire. I hope it comes to fruition.”
He noted that previous attempts at cease-fire negotiations had failed due to new demands from Israel. “In most of those instances where the talks collapsed, it has been because new requirements or demands were added on the part of Israel,” he explained.
Prince Faisal also addressed Saudi Arabia’s position on Lebanon, emphasizing a hands-off approach. “We have never fully disengaged. But we believe it’s up to the Lebanese politicians to seek a direction that puts Lebanon on the right track,” he stated.
He added: “It’s not up to any outside influence, any outside countries, or any outside powers to tell the Lebanese what to do or to influence the political process in Lebanon. That is our opinion.”
Regarding relations with Iran, Prince Faisal indicated that recent discussions focused on regional de-escalation. “I hope that Iran, like us, is working toward regional de-escalation on all fronts, not just in Lebanon. That’s very much the focus of my conversations with my Iranian counterpart,” he said. While he could not be “confident of anything that is in the control of other parties,” he emphasized the importance of avoiding further escalation.
“I have made it clear to our Iranian counterparts that it is important to avoid any further escalation. My sense is that they realize the risks of escalation and would prefer to avoid it. But, of course, they have their own strategic calculations.”
NBK eyes partnerships in Saudi Arabia to tap Vision 2030 opportunities across diverse sectors
- NBK has developed strong connections with key players, including other financial institutions
- NBK signed four agreements worth $1.6 billion, underscoring the growing demand for sophisticated financial solutions within Saudi Arabia’s evolving market
RIYADH: The National Bank of Kuwait is looking to partner with different companies in Saudi Arabia as the Kingdom’s Vision 2030 opens opportunities for financial partnerships, a senior executive said.
Speaking to Arab News on the sidelines of the Future Investment Initiative in Riyadh, the General Manager of the National Bank of Kuwait in Saudi Arabia, Anas Al-Ubaid, highlighted that NBK has developed strong connections with key players, including other financial institutions.
“We have a good partnership with a lot of government bodies, corporates, and even private banking or high net worth individuals,” Al-Ubaid said.
He added: “We’re here on the market since 2006. We’re serving the market. We partnered up with the majority of the names in that market, even with banks. Once the opportunities arise, definitely we could partner up with them.”
Al-Ubaid also explained how the bank’s approach goes beyond traditional lending to provide customized financial solutions that meet specific client needs and support their business growth.
“The way we look at it here at NBK, it’s not just about lending. It’s about providing tailored financial solutions for our clients, serving their needs, and also helping them to grow their businesses,” he said.
Al-Ubaid continued: “There is no definite sector that we’re looking at. We’re looking at all areas that we could help with and help our partners in the markets.”
He added: “Our expertise is in tailoring solutions for clients, whether corporates or individuals,” highlighting NBK’s focus on customized financial services that support Vision 2030.
He further underlined that the Saudi market offers significant growth potential for banks, particularly as demand rises for customized financial solutions.
“I would say there’s a lot of opportunities in the markets for banks and financial institutions to grow in that area. Definitely. The market is eager to see more tailored solutions for clients, especially now the clients in Saudi,” Al-Ubaid said.
On the first day of the event, NBK signed four agreements worth $1.6 billion, underscoring the growing demand for sophisticated financial solutions within Saudi Arabia’s evolving market.
One agreement was inked with ACWA Power – worth SR2.6 billion ($690 million) – to support the company’s expansion in energy and water resource sectors across the Middle East and North Africa.
Additionally, NBK established an SR1.8 billion credit facility with Al Gihaz Contracting Co., helping fund the Kingdom’s largest energy storage project.
Agreements were also signed with Pan-Kingdom Holding Group and Alyusr Leasing to further their operational goals, with the deals valued at SR1 billion and SR750 million, respectively.
