British energy giant BP has entered the Moroccan upstream, acquiring stakes in three offshore exploration blocks, its partner Kosmos Energy said Tuesday, reflecting growing interest in the kingdom’s potential oil reserves.
The news will come as a boost to the North African country which imports virtually all its energy needs and last month began implementing a fuel price indexation system to rein in its unaffordable oil subsidies.
Kosmos said it had farmed out stakes to BP in the three blocks in the Agadir basin that it operates, with the British oil major acquiring a 45 percent interest in two of them and a 26 percent interest in the third.
Texas-based Kosmos said it planned to start drilling in the first half of next year in the three blocks, which cover approximately 25,000 square kilometers (10,000 square miles) and run to water depths of 3,000 meters.
BP is the second major oil company to acquire offshore Moroccan acreage this year, after Chevron signed agreements for three blocks also off the coast of Agadir in January.
Other smaller oil firms are active in the exploration frontier country, notably British explorer Cairn Energy and Genel Energy headed by former BP chief Tony Hayward.
HSBC bank, in a research note, highlighted the possible benefits of investing in the Moroccan upstream.
“Given the lack of major commercial discoveries of oil and gas, Morocco has some of the most attractive fiscal terms in the world,” it said, adding that companies were looking for “large structures” similar to oil discoveries made in eastern Canada.