Executive Q&A – Independent Oil & Gas Focus
Executive Q&A with Andrew Benitz, COO, Longreach Oil & Gas By Drake Lawhead
Andrew, how would you describe Longreach in a single sentence to an investor?
Longreach is a fast growing oil and gas exploration company listed on Toronto’s TSX-V developing significant licence interests in offshore and onshore Morocco.
Morocco isn’t a well-known petroleum hotspot, but presumably you’ve seen something there you like. Can you explain the thesis behind the decision to focus exclusively there?
Morocco is an underdeveloped exploration area and is also Africa’s second largest energy importer. They import 93% of their oil and 91% of their natural gas consumption. The country needs solutions to cut their dependence on energy imports, estimated at US$10.7 billion in 2011, while they face the challenge of a robust growth of energy demand: +54% over the past 10 years, and forecasts predict it could triple by 2030. For Longreach, Morocco is a growing economy and a stable political regime; the country offers an attractive fiscal environment for foreign investors with the state only taking a capped 25% interest in discoveries, with low royalties of 5% for gas and 10% for oil and there is the benefit of a 10 year corporate tax holiday on discovery which is hugely competitive compared to neighbouring areas. From a geological point of view, Morocco is surrounded by hydrocarbons in North Africa with Algeria, Libya and Egypt to the east, and East Canada to the west, which was part of the Moroccan Atlantic during the late Triassic. There is clearly potential yet the country remains under explored. Morocco’s hydrocarbon potential is now beginning to be realised with recent discoveries being made and increased investment from foreign companies driving the industry. This is why we have committed our efforts on developing significant acreage positions which can be easily tied into the domestic market.
Morocco avoided hitting the headlines last year as other North African states experienced major political turmoil. Can you talk about political risk in Morocco and how you find working with the authorities?
Morocco is a constitutional monarchy ruled by King Mohammed VI sharing powers with a democratically elected parliament. The King set about modernising the constitution when he ascended to the throne in 1999. There have been a series of constitutional changes over the last decade at the King’s behest before the ‘Arab Spring’ mobilisation in 2011. Since then there have been further constitutional amendments towards greater democracy. The country recently had legislative elections which resulted in a new coalition government. I can say confidently that the degree of political risk in Morocco is low. We’ve great relationships with ONHYM, the state energy company and enjoy working with officials in Morocco who are eager to work alongside international E&P cos.
What is/are the comparative advantage Morocco possesses over its more prolific neighbours?
The topside advantages are clear; political and economic stability, phenomenal fiscal terms for oil and gas exploration and a very robust and growing domestic energy market, ensuring no discoveries in country will be stranded. Longreach was one of the first movers in Morocco when we started acquiring licence interests in 2007. We were able to build a substantial acreage position of some 13 million gross acres of meticulously handpicked land in which we are very confident hydrocarbons can be recovered.
Looking elsewhere, what other parts of Africa do you find most interesting from an E&P perspective, and would you consider venturing into some of those?
Drillers and Dealers :::
::: February 2012 Edition
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62