A. Latif Baraka: Heba Press
A British energy company has confirmed its reluctance to invest in Algeria, indicating that it will continue its work in Morocco in the coming years, through gas projects and hydrocarbon exploration.
Sound Energy has revealed plans to continue gas exploration in Morocco, following its announced exit from the Kingdom after selling its assets to a Moroccan mining company.
Graham Lyon, CEO of Sound Energy, said in statements seen by the Washington-based energy platform: “I will not invest in Algeria for a variety of reasons… I tried to do it, and it was not good and it was very difficult to launch projects there.
Leon also refused to invest in Nigeria despite the abundant gas reserves there; due to the difficulty, he said.
He added: “Everything is completely different in Morocco… They say we want you to come and invest, we want you to dig wells, we want you to do exploration, and we will give you a tax exemption for 10 years, and a 25-year contract.
Sound Energy’s gas exploration activities in Morocco have been active in recent months. It is on the verge of realizing the first revenues from the Tundara field, in addition to the extension of the Anwal field licenses and the resolution of its problems with the tax authorities, which led Managem to acquire the majority of the shares of its active branch in the Kingdom.
Last July, the National Office of Hydrocarbons and Minerals approved a 24-month extension of the initial exploration permit period for the Anwal gas field, a decision that solidifies Sound Energy’s efforts to accelerate the pace of gas exploration in Morocco.
On July 18, the board of directors of Managem, Morocco’s largest mining company, approved an agreement to purchase Sound Energy’s Moroccan assets, valued at $45.2 million.
The Sound Energy and Mines agreement concerning the gas assets in Morocco stipulates that 20% of the production rights of the Tandrara field will remain in the hands of the British company, in addition to 27.5% of the exploration and production working rights in the “Great Tandrara” and “Anwal” fields.
The sale was aimed at developing production at the Tenderara gas field in the east of the country, which is expected to start production next year (2025), with a capacity of 100 million cubic meters per year.
Sound Energy CEO Graham Lyon said in an interview with the website “Iqtisadcom”, consulted by the energy platform: “We have a large gas field in Morocco, with reserves of 370 billion cubic feet, the first phase of which is being developed, during which the gas will be sold to the… local market through industrial buyers.
He added: “The phase includes a liquefied gas project, consisting of transporting Tenderara gas by trucks to the market in the west of the country, in addition to a larger project consisting of building a gas pipeline and connecting it to the Maghreb-European gas pipeline which crosses northern Morocco to Spain.
European Maghreb Gas Pipeline
The CEO of Sound Energy confirmed that his company will soon begin implementing a project to connect to the Maghreb-European gas pipeline, in order to transport gas from the Tenderara field to the local market and export it abroad.
He said: “Morocco has a pipeline that starts in Algeria and crosses the territory of the Kingdom. We are looking to connect to it, which requires us to build a 120-kilometer pipeline, which we are currently planning, and we have obtained financing from Attijariwafa Bank to start developing the project in order to sell gas through the pipeline.
He stressed that there are two gas-fired power plants on the pipeline that currently use expensive gas from Spain to power them, and that it is preferable to use gas produced locally in Moroccan power plants.
He stressed that his company enjoys the support of the Moroccan government and has a gas sales contract with the National Office of Electricity and Drinking Water, and is working in coordination with its new partner, Managem, to provide Moroccan solutions through the Tundara gas field to supply power plants, which represents a profitable business for Morocco.
Investing in Morocco
Graham Lyon has denied Sound Energy’s intention to withdraw from the Moroccan gas market, welcoming the support the British company receives from the Ministry of Energy, the National Office of Hydrocarbons and Minerals and local banks, calling on other British companies to come and invest in Morocco.
He said: “We have a permit in southern Morocco, at a very early stage of exploration; therefore it is necessary to accelerate the development work at Tenderara and produce gas at the end of this year or early next year, in order to take the final investment decision for the pipeline project.
Leon revealed the benefits of investing in the Kingdom, saying: “Investing in Morocco is a very positive thing. “They are very supportive of British work and encouragement of British businesses, not only in the oil and gas sector, but in any other sector.”
He added: “Morocco has a friendly environment, good rule of law, good government, good financial situation and above all good taxation; the company had some tax issues, which have been resolved, and there is a good balance between offering a good reward and encouraging investment; “So Morocco is an excellent place to do business.”
He explained that investing in renewable energy and hydrogen is part of his company’s interests to increase its investments in Morocco in the coming period, highlighting his company’s plans to exploit renewable energy sources in Tenderara, through the construction of a station with a capacity of between 10 and 20 megawatts to secure the project’s electricity needs, which allows the supply of gas in order to increase its sales on the local market or for export in the future.
