LATEST ECONOMIC BRIEFINGS
THAILAND | 05.02.2010
Thailand is looking to overhaul the country's rail network, planning to combine state spending with private sector investments to revamp a system that in recent years has been overtaken by road transport as the economy's primary freight mover.
OMAN | 05.02.2010
Investors will be hoping the steady recovery posted by the Sultanate's equities last year will continue into 2010. Already, early signs of confidence are becoming apparent, with initial public offerings (IPOs) expected to resume shortly and a degree of bullishness prompted by resurgent oil prices.
SAUDI ARABIA | 05.02.2010
As the Gulf Cooperation Council's biggest economy closes the books on 2009, it may well be remembered as a year of caution and mixed fortunes. Economic growth was positive and inflation fell, but lower oil prices caused the state budget to drift into deficit territory. Nevertheless, with the government clearly committed to supporting the economy through stimulatory spending, higher growth is already expected in 2010.
ROMANIA | 04.02.2010
Having been one of the driving forces in the Romanian economy up until the end of 2008, the construction sector has had to take a back seat over the past 12 months, with workers being laid off, many new projects put on the backburner and ongoing developments halted as funding and demand dried up.
LEBANON | 01.02.2010
Lebanon continued to defy the expectations of many in 2009, being able to not only weather the worst of the global financial crisis but also post solid economic gains while undergoing another period of political tension.
COUNTRY COVERAGE
Looking for Black Gold
Morocco, Volume 63
20.04.2005
20.04.2005
Recent oil discoveries off the shores of neighbouring Mauritania have given a welcome boost to hopes in Rabat that a similar energy bonanza might be on its way to Morocco. Yet while geology may yet favour the kingdom, some are arguing that further development of the hydrocarbon sector will require a great deal more investment in exploration. Where this might come from is the subject of some debate, however, with some pointing to structural reform and a more open economy as likely to generate much of this sought after investment.
Certainly, visiting US Deputy Assistant Secretary of State for Near Eastern Affairs Liz Cheney was pushing such a line during her recent visit to Morocco. Top of her agenda was the forthcoming implementation of the Free Trade Agreement (FTA) Rabat signed with Washington last June. This is set to slash tariffs off 95% of all goods traded between the two countries, an economic jolt that needs some major adjusting to. To help ease this, the US has set aside $6m for Morocco as part of its Middle East Partnership Initiative (MEPI). Funds from this will be targeted to help reform of the economy, and of the political framework.
Cheney was clearly pleased with what she had found in Rabat and elsewhere, saying on April 12 that "Morocco could be a model for countries of the region... King Mohammed VI has put the country on the path of modernisation while respecting Morocco's culture and traditions."
That was good news for the Moroccan government, which had meanwhile been hoping for a lot more good news from its southern shores.
The managing director of the Moroccan Office of Hydrocarbons and Mining (ONHYM), Amina Benkhadra, told reporters April 15 that the recent discovery of oil in Mauritanian waters adjacent to Moroccan territory was a highly positive sign, as experts were "convinced the two adjacent offshores are similar geologically," the weekly La Vie Eco reported.
This might indicate a reserve waiting to be discovered. Yet by highlighting the potential, Benkhadra was also highlighting a need for more resources to be devoted to exploration, many observers felt. Interviewed earlier in the week by the daily Assahra al-Maghribya, the ONHYM MD claimed that drilling in Morocco had not yet reached 0.01 wells per 100 sq km, while the international average was eight wells per 100 sq km.
ONHYM has an annual budget of some Dh110m ($12.96m), which Benkhadra said was not enough to conduct the kind of comprehensive study and research necessary in oil and mineral exploration. Without this, the country's energy potential remains a mystery. Prospecting is a "complex, very costly and high-risk process," she said, adding that much depended on the geology of the sedimentary fields, with this determining the length of time taken in order to assess a basin's potential oil and gas content.
Yet that is not to say exploration is not continuing. Fifteen international oil companies are currently prospecting in various regions of Morocco, making combined investments of around Dh500m ($58.90m) a year.
However, there is clearly a growing problem with Morocco's energy needs that is spurring greater interest in discovering more hydrocarbon deposits domestically.
While next door in Algeria, gas and oil have been found and successfully exploited in large quantities, Morocco has never had much luck in finding and developing its own reserves. With exploration beginning as long ago as 1929, domestic oil production hit its peak as far back as 1973, at 420,000 tonnes per annum (tpa). Since the mid 1990s, however, it has hovered below 9000 tpa. There have been discoveries of more gas deposits, but reserves have been gradually depleting.
Of those oil and gas fields currently in production, the key ones are the Essaouira Basin on the coast, which produces oil and natural gas, and the Gharb Basin in the north of the country, which produces natural gas. There is also a substantial gas field at Meskala, just north of Essaouira.
With Morocco's sedimentary basins covering a total exploration area of 417,000 sq km though, there may still be plenty more out there. If there is, it would be most welcome, particularly at a time of high and still rising oil prices. The kingdom's oil imports saw a jump in value of $260m last year on the 2003 total, standing at $2.6bn by the end of 2004.
Combine this price rise with an already increasing demand due to economic development and population growth and it is not difficult to see why Benkhadra was so keen to stress the need for more exploration.
Perhaps, some hope, with the FTA on the way - alongside similar free trade deals with the European Union - more foreign investment in general will come to Morocco, encouraging a warmer climate - and a bigger budget - for research and exploration too. The energy sector has already made great strides towards liberalisation, while the site of a major oil find on the Mauritanian frontier would in any case have its own logic for the oil giants. Meanwhile, there are plenty of fingers crossed in Rabat.
Certainly, visiting US Deputy Assistant Secretary of State for Near Eastern Affairs Liz Cheney was pushing such a line during her recent visit to Morocco. Top of her agenda was the forthcoming implementation of the Free Trade Agreement (FTA) Rabat signed with Washington last June. This is set to slash tariffs off 95% of all goods traded between the two countries, an economic jolt that needs some major adjusting to. To help ease this, the US has set aside $6m for Morocco as part of its Middle East Partnership Initiative (MEPI). Funds from this will be targeted to help reform of the economy, and of the political framework.
Cheney was clearly pleased with what she had found in Rabat and elsewhere, saying on April 12 that "Morocco could be a model for countries of the region... King Mohammed VI has put the country on the path of modernisation while respecting Morocco's culture and traditions."
That was good news for the Moroccan government, which had meanwhile been hoping for a lot more good news from its southern shores.
The managing director of the Moroccan Office of Hydrocarbons and Mining (ONHYM), Amina Benkhadra, told reporters April 15 that the recent discovery of oil in Mauritanian waters adjacent to Moroccan territory was a highly positive sign, as experts were "convinced the two adjacent offshores are similar geologically," the weekly La Vie Eco reported.
This might indicate a reserve waiting to be discovered. Yet by highlighting the potential, Benkhadra was also highlighting a need for more resources to be devoted to exploration, many observers felt. Interviewed earlier in the week by the daily Assahra al-Maghribya, the ONHYM MD claimed that drilling in Morocco had not yet reached 0.01 wells per 100 sq km, while the international average was eight wells per 100 sq km.
ONHYM has an annual budget of some Dh110m ($12.96m), which Benkhadra said was not enough to conduct the kind of comprehensive study and research necessary in oil and mineral exploration. Without this, the country's energy potential remains a mystery. Prospecting is a "complex, very costly and high-risk process," she said, adding that much depended on the geology of the sedimentary fields, with this determining the length of time taken in order to assess a basin's potential oil and gas content.
Yet that is not to say exploration is not continuing. Fifteen international oil companies are currently prospecting in various regions of Morocco, making combined investments of around Dh500m ($58.90m) a year.
However, there is clearly a growing problem with Morocco's energy needs that is spurring greater interest in discovering more hydrocarbon deposits domestically.
While next door in Algeria, gas and oil have been found and successfully exploited in large quantities, Morocco has never had much luck in finding and developing its own reserves. With exploration beginning as long ago as 1929, domestic oil production hit its peak as far back as 1973, at 420,000 tonnes per annum (tpa). Since the mid 1990s, however, it has hovered below 9000 tpa. There have been discoveries of more gas deposits, but reserves have been gradually depleting.
Of those oil and gas fields currently in production, the key ones are the Essaouira Basin on the coast, which produces oil and natural gas, and the Gharb Basin in the north of the country, which produces natural gas. There is also a substantial gas field at Meskala, just north of Essaouira.
With Morocco's sedimentary basins covering a total exploration area of 417,000 sq km though, there may still be plenty more out there. If there is, it would be most welcome, particularly at a time of high and still rising oil prices. The kingdom's oil imports saw a jump in value of $260m last year on the 2003 total, standing at $2.6bn by the end of 2004.
Combine this price rise with an already increasing demand due to economic development and population growth and it is not difficult to see why Benkhadra was so keen to stress the need for more exploration.
Perhaps, some hope, with the FTA on the way - alongside similar free trade deals with the European Union - more foreign investment in general will come to Morocco, encouraging a warmer climate - and a bigger budget - for research and exploration too. The energy sector has already made great strides towards liberalisation, while the site of a major oil find on the Mauritanian frontier would in any case have its own logic for the oil giants. Meanwhile, there are plenty of fingers crossed in Rabat.
