Morocco unveils its energy strategy for 2007-2012

2007-07-20

Morocco has announced an aggressive programme to reform its energy sector, committing $7.7 billion through 2012 to diversify its energy sources and enhance competition in domestic and regional markets.

By Sarah Touahri for Magharebia in Rabat – 20/07/2007

[Sarah Touahri] Energy Minister Mohamed Boutaleb

Morocco plans to invest $7.7 billion in the energy sector over the next five years, Energy Minister Mohamed Boutaleb announced in a press statement July 12th. Boutaleb explained that projects both underway and planned for the future will satisfy the country's energy needs and support its socioeconomic development.

Morocco added natural gas to its national energy supply system in February 2005, as part of a bid to diversify its energy sources. This fuel currently accounts for 13% of the country's generated electricity. The government has decided to continue these efforts to develop the use of natural gas in light of the fact that industrial operators' requirements for natural gas are expected to reach 10 billion cubic metres by 2020.

The energy ministry carried out a technical and economic study to determine the optimal infrastructure for the development of natural gas use in Morocco, and decided that a new gas terminal with an initial annual capacity of 5 billion cubic metres will be required by 2013, doubling to 10 billion by 2020.

With regard to refining, negotiations are underway with a number of oil companies from countries including Spain, the United Arab Emirates and Kuwait to build a second refinery in Morocco. The aim is to safeguard the ongoing supply of petroleum products in the country by making available a new domestic supply source and also exporting products to countries with insufficient refining capacity.

Officials at the Ministry for Energy say hydrocarbon prospecting and exploration have been boosted in recent years by a number of reforms, particularly the adoption of a new Hydrocarbons Code and the establishment of a National Hydrocarbons and Mines Office which will oversee prospecting and exploration. At present the majority of promising sites are the subject of reconnaissance or prospecting permits held by a total of 23 major international oil companies.

The National Hydrocarbons Office is expected to spend $163 million on exploration during the 2007-2011 period.

In the area of electricity, nearly $6 billion will be invested in generation resources through 2012 as part of a power supply project. The Energy Minister said the rural electrification programme raised the rural electrification rate from 18% in 1995 to its current level of 98%. One current area of activity is a bill in the legislature to modernise the power sector. It will open the sector up to competition, change the way in which it is organised and create a free market alongside the existing one. The job of regulating the industry will be the task of a national power regulation agency.

Morocco is the world's leading exporter of phosphates and their derivatives and the energy minister said the National Phosphates Office will adopt a financially viable development strategy by developing partnerships with operators both in Morocco and abroad to strengthen the country's position in the international market. The ministry projects major investment during the 2008-2011 period in exploitation ($220 million) and efficiency ($195 million) projects.