The Commodity Investor: Oil Firms Moving On The Next Frontier, Offshore North Africa

January 29, 2014

 

The New Eldorado

Over the last 18 to 24 months, we’ve seen a tremendous amount of interest by offshore companies in blocks in North Africa. One country that has gotten particular attention has been the Kingdom of Morocco. In recent months, we can count almost a dozen companies that have signed up for exploration blocks in the kingdom.

Companies as small as Tangiers Petroleum (ASX:TPT) and as large as BP (NYSE:BP) have recently signed agreements with the ministry in order to explore for oil in offshore Morocco. While there hasn’t been any blockbuster discovery such as the Jubilee field in Ghana, some oil has been discovered, although it isn’t in a commercially viable quantity.

Many local experts I’ve spoken with are cautiously optimistic that there may be some unique blocks in the country that could yield to large discoveries. Below are some companies that are active in the country and that have some very interesting prospects.

While a number of players are active in Morocco right now, there are a few that stand out. Chariot Oil & Gas (LON:CHAR) has very interesting blocks in northern Morocco, far from where many of the traditional blocks are being farmed out. The fact that it has gone further afield may be rewarding down the line.

Chevron (NYSE:CVX) is a familiar name in the oil industry, and it has decades of experience operating in frontier basins. They signed an agreement in 2013 in order to explore three sizable blocks in southern Morocco. Offshore Morocco has garnered plenty of interest from the oil exploration community, and it is an area that may end up being very value-accretive for the country as well as its investors.

 

Disclosure: The author doesn’t have any positions in the stocks mentioned.


Amine Bouchentouf is a partner at Parador Capital LLC, an institutional advisory firm focused on commodities and emerging markets. He is the author of the best-selling “Commodities For Dummies,” published by Wiley. Amine is also the founder of Commodities Investors LLC, an advisory firm dedicated to providing insightful information on all things commodities. He can be reached at [email protected].


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