Chevron Hunting Moroccan Elephants Marks First Oil Boom: Energy

March 1, 2013

Chevron Corp. (CVX) and Genel Energy Plc (GENL) are hunting for elephants in Morocco, Bloomberg reports. Not the animal, rather the giant oil fields that send explorers’ market values soaring when they’re discovered in the frontier.

Oil companies are planning as many as 10 wells in Moroccan waters through 2014, according to Citigroup Inc. That’s twice what was drilled in the past decade and represents the fastest pace opening wells since at least 2000. U.K.-based Cairn Energy Plc (CNE) is scheduled to start drilling the Foum Draa prospect in the fourth quarter. Chevron, the second-biggest publicly traded U.S. oil producer, picked up three offshore licenses last month.

Africa has seen a string of big discoveries in recent years, including Tullow Oil Plc’s Jubilee field in Ghana in 2007, a find that exceeds 5 percent of Chevron’s global reserves. As more prospectors study Africa, Morocco’s stability through the Arab Spring revolts and 10-year tax holiday to drillers is making the country more attractive.

Genel, run by former BP Plc Chief Executive Officer Tony Hayward, said today it may drill its first well in Morocco in the fourth quarter and three more next year. The prospects it’s exploring in the country may hold as much as 2.4 billion barrels of crude, Chief Financial Officer Julian Metherell said in a telephone interview.

Chevron, Spain’s Repsol SA (REP) and Kosmos Energy of Bermuda are vying with relative minnows such as Fastnet Oil & Gas Plc (FAST) and Chariot Oil & Gas Ltd. (CHAR) in the hunt for fields to rival recent discoveries in Ghana and Mozambique that promise energy wealth to countries on the poorest continent.

After decades of production in Angola and Nigeria on Africa’s central west coast, drillers are pushing into the frontiers of Morocco and Mauritania in the north and Namibia in the south.

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