The UK-based oil and gas company is in talks regarding exports to Spain London-based Chariot Oil and Gas has competed the development feasibility study for its project to develop Morocco’s Anchois gas field.
The company said that results of the study confirmed that the project is technically feasible with the potential for either a single phase or a staged development to commercially optimise access to different parts of the gas market.
In its full year 2019 results, Chariot said that one of its strategic focuses for 2020 was completing a pre-front-end engineering and design (pre-feed) analysis to define the Anchois field development. It is hoping that the pre-feed will act as a catalyst to unlock debt finance.
Chariot is hoping to secure a heads of agreement on gas sales with potential offtakers at some point in 2020.
Larry Bottomley, the chief executive officer of Chariot, said: “Initial discussions have been held with ONEE, the Moroccan state electricity company, and the key players in the Spanish gas market, with a view to future gas-offtake arrangements.”
The company said that it is also seeking “asset validation and de-risking through partnering”.
Chariot said that it is also “evaluating new leads identified during technical review, with companies participating in the partnering process.
The Ancois gas field is in Chariot’s Lixus licence, which covers and area of 2,390 square kilometres (sq km). Chariot was awarded the Lixus offshore licence in April last year and believes the total resources at Lixus could be as much as 2.2 trillion cubic feet (tcf).
Bottomley said: “While the early part of 2019 marked a shift in the balance of our portfolio, with the addition of the Lixus licence, the latter half of 2019 and the start of 2020 has seen the company re-prioritise its strategy, accelerating efforts towards monetising a major gas development project in Morocco.
“The asset has the potential to deliver near-term cash flows and delivers a more suitable fuel source for global economies looking to transition to less carbon-intensive energy sources.
“This re-focus has coincided with the impact of Covid-19 on the economic and operational environment.
“Chariot was able to respond quickly and implemented an extensive cost-reduction programme to restructure the organisation, ensuring the retention of key skills and the operating capability to deliver on Lixus, while enabling the business to preserve cash.
“The Anchois field development has strong environmental, social and governance (ESG) credentials and, when developed, will provide Morocco with a reliable domestic gas source.
“Gas from Anchois has the potential to form a fundamental part of the energy mix, aiding the country’s transition from imported oil and coal in its energy consumption, with any excess gas exported via the Gazoduc Maghreb Europe pipeline (GME) to Spain.
“The studies undertaken have highlighted the technical feasibility and economic viability of a development and the gas market analysis confirms the potential to deliver gas into Morocco and/or Spain at a price that delivers strong returns on the capital invested.
“Reliable and plentiful supply of energy from a domestic source can enhance conditions for economic growth, particularly in such a fast-growing economy, where energy demand is predicted to double between 2015 and 2030.
“A successful project delivery and development of a sustainable Moroccan gas business will act as a catalyst for jobs in Morocco and the overall wealth of the country.”
Chariot also has two other offshore licences in Morocco. These are known as Mohammedia and Kenitra.
Mohammedia covers 4,654 sq km and Kenitra covers 1,400 sq km. Chariot is currently reviewing Mohammedia and Kenitra and will make a judgement based on “proceptivity and the current market environment”, according to its latest results statement.
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