Oil industry eyes disputed African offshore zones

The British oil company Dana Petroleum announced May 26 it has acquired a large interest in the ongoing oil explorations offshore Morocco’s town of Safi. Dana, based in Scottish Aberdeen, produces oil in the British sector of the North Sea and Russia, but is engaged in explorations in Mauritania, Senegal, Ghana and Kenya. It holds that the waters off central Morocco are promising and under-explored.

The company announced that it has acquired the rights of Global Resource Holdings, representing 35% interest in an exploration covering the north-western Safi area offshore the Atlantic coast of Morocco. The remaining 65% is held by Norsk Hydro, a large Norwegian energy company.

“Being relatively under explored, offshore Morocco offers significant potential which Dana is looking forward to pursuing in partnership with Norsk Hydro and ONHYM, the Moroccan national oil company,” the company’s chief executive Tom Cross said in a statement.

The blocks offshore Safi are safely placed within Moroccan jurisdiction – Safi being located between Casablanca and Agadir. It is one of the few potential oil fields the Moroccan government seeks to explore that go clear of political risks. Other potential fields include areas claimed by both Morocco and Spain’s Canary Islands and the waters off the coast of Moroccan-occupied Western Sahara.

Most Moroccan oil explorations have so far been concentrated in these disputed areas. The disputed zone between the Canary Islands and the southern tip of Morocco are already known to hold commercially viable oil resources. But exploitation has been blocked by popular protests in Fuerteventura, the Canary Island closest to the wells, and a dispute between Rabat and Madrid over the maritime border.

Offshore Western Sahara, the situation is even more confusing. Here, international protest has driven most foreign companies contracted by ONHYM to leave the occupied territory. Only the US company Kerr-McGee still operates here. Meanwhile, the exiled Sahrawi government in 2002 granted exploration rights to the British-Australian company Fusion Oil and recently announced a new round of licensing.

Significant oil discoveries off Mauritania and the Canary Islands indicate that the entire area offshore Western Sahara and Morocco may hold large oil and gas resources. Also further south, offshore Senegal, Guinea-Bissau and Guinea, large hydrocarbon resources are expected. (Afrol News, May 26)

See our last posts on the current unrest in Western Sahara and Mauritania. We recently noted in a commentary that the world oil industry and Pentagon alike have assigned West Africa a strategic role in the 21st century.