His Majesty King Mohammed VI Contents Message from the Managing Director 4 International environment and national situation 6 Highlights 10 Petroleum exploration 11 Petroleum participations and cooperation 21 Petroleum drillings and production 24 Oil shale 26 Mining exploration 27 Mining participations and cooperation 39 Mining drillings 41 Human resources 43 Computer technology and information system 46 Activity Report 2008 MESSAGE FROM THE MANAGING DIRECTOR The year 2008 confirmed the continuing improvement of the performances of ONHYM in comparison with the previous year with regard to the tangible results achieved in both mining and hydrocarbon exploration, two core activities that were led in synergy with the development of several partnerships. This was shown, in particular, by an extension of prospecting zones and an intensification of the work undertaken, allowing the identification of encouraging prospects. For ONHYM, 2008 has been year of continuity and deepening of its activities with a maintained pace in spite of the disturbances undergone by the international markets of the mineral and energy raw materials. The budgets dedicated to the mining and oil exploration recorded a slight increase compared to the year 2007. Petroleum Exploration concerned a mining domain of nearly 321 707 km2 against 288 349 km2 in the previous year, mainly as a result of the conclusion of two new petroleum agreements and three new reconnaissance contracts associating new international operators. Exploration efforts of our partners concerned the realization of four drilling wells among which one in offshore, and the acquisition of 2 431 km of 2D seismic survey and 486 km2 of 3D seismic survey, recording a net progress compared to the year 2007. Gravimetric and magneto metric airborne surveys, covering 6 4351 km, as well as the ground gravimetric campaign (2578 stations) were also carried out in areas that have been until now underexplored. Anomalies and potential structures, play concepts and promising prospects were identified on several permits, both offshore and onshore. Some studies were conclusive enough to identify the location of twelve wells and to start the preparation of platforms for their realization in 2009. The various steps for the development of the oil shales in the frame of partnerships have noticeably progressed on the Tarfaya and Timahdit deposits. As far as Mining Exploration is concerned, research themes were diversified and the activity has been focused on the most promising zones, thanks to the intensification of a conceptual targeting, which allowed the identification of new objectives. The works performed in a mining domain including 855 licenses, concerned 26 objectives among which 16 for precious metals, 8 for basic metals and 2 for rocks and industrial minerals. In continuity of the previous years, works have been achieved on the most prospective zones of the Anti Atlas, the High Atlas Mountains and Jebilets-Guemassa, with a sustained research effort in the Southern provinces, where an important campaign of regional geochemistry was achieved. The projects that have been given a particular interest include Azouggar N’Tilili’s (polymetallic-gold), Glibat 4 Office National des Hydrocarbures et des Mines Activity Report 2008 Lafhouda and Twihinate (Fe, Nb, Ta, U and light rare earths) and Lafwila, for the gold bearing structures. A new prospect was also identified at Lamlaga (Fe, Nb, Ta, U and light rare earths). A call for tender was launched for the transfer of Azouggar N’Tilili’s project after the conclusive results of the orientation study which has been carried on this project. The certification in compliance with the ISO 9001 reference, version 2000, was resumed in 2008 for the mines laboratories. Mining drilling activity recorded this year a considerable recovery as the volume of works increased by 52 % compared to the year 2007. The information system registered the implementation of the projects, retained in the frame of the master plan finalized in 2007, according to the «project management» methods adopted in the charter of functioning. The realization of these projects involving petroleum and mining exploration activities, finances, logistics, human resources and data processing infrastructure, will allow ONHYM to better master its data in terms of safety, reliability and availability. It will also allow ONHYM to become eligible to the subsequent control of the State. Concerning the human resources, two operations of simplification and clarification of the management methods have been completed. The first one concerned the harmonization of the rules of management for the entire staff, and the second concerned the implementation of the time management system. These are the main lines of the activity of ONHYM during the year 2008. Thanks to the commitment of its partners and to the devotion of its staff, ONHYM could achieve its objectives, thus contributing to the economic and social development of Morocco, under the High Guidance of HIS MAJESTY THE KING, May GOD glorify Him. Amina BENKHADRA 5 Office National des Hydrocarbures et des Mines Activity Report 2008 INTERNATIONAL ENVIRONMENT & NATIONAL SITUATION The financial and economic crises that marked International oil environment : a more and the year 2008 have led to historical increases in more unstable market oil prices and to reduced consumption. From 50 dollar/b in January 2007, crude oil As for mining products, 2008 was characterized prices rose to 100 dollars in January 2008 to by an unprecedented reversal of situation. reach a record level of 147 dollars in July 2008. As a result of the slowdown of the world activity, The investments in oil exploration and mining crude oil prices fell back to their level of January continued to grow significantly. 2007. Morocco has implemented a new strategy with If demand in emerging countries like China, a view to secure its energy supplies. India and Brazil and speculation were the main causes for the oil price surges throughout the International environment last three years, the drop in oil prices, started in the summer of 2008, reflects the fall off in world The world economy : from financial to oil demand following the slowdown of economic economic crisis activity in the large industrialized countries which expanded to the rest of the world. This has led After an exceptional year 2007 on several the International Energy Agency (IEA) to revise respects, 2008 is viewed as the year that its world oil consumption forecasts downwards witnessed the worst financial crisis since the for 2008 which are estimated at 86.2 million 1928 depression. The premonitory symptoms b/d. started in August 2007 in the United States with the subprime mortgage crisis. The financial Despite this collapse in oil prices, the world crisis expanded progressively to Europe and enters an era of expensive oil which will Japan thus causing the collapse of the main remain, however, marked by volatile prices stock exchanges and compelling the main and intermittent unbalanced markets. If industrialized countries to intervene by injecting the investments required for strengthening liquid assets by billions of dollars with an eye to infrastructures, increasing production capacities save their banking system. and providing against the decline in reserves by new discoveries are not implemented from now The financial crisis has had negative impacts on on to meet the demand that will grow as soon the real economy with the entry into recession as revival comes back, the world will face new of the main industrialized economies. The world oil crises. Gross Domestic Product growth passed from 5.2 % in 2007 to 3.4 % in 2008 according to In the upstream oil sector, world E&P investment the International Monetary Funds which expects rose by 19 % in 2008, and should settle in 2009, a regression of 0.5 % for 2009. according to Institut Français de Pétrole (IFP). 6 Office National des Hydrocarbures et des Mines Activity Report 2008 Evolution of crude oil prices in 2008 $/b 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Annual average * Brent, Rotterdam quotation Source : IFP International mining environment : a an average increase of 25 % compared with reversal of situation after historical records 2007 ; the rates of gold increased by 12 %. The international financial crisis and the The consequences of this reversal in the slowdown of the world economic activity have international environment begin to be felt. led to a drop in demand especially of industrial Thus, the Anglo-Australian group BHP Billiton metals. has recently given up its takeover bid hostile to its compatriot but competitor Rio Tinto. On After pulverizing all high records, base metal the other hand, Arcelor-Mittal, the largest steel prices started a decrease from the summer company in the world has recently announced 2008 and came back to 2004 -2005 levels. production and job cuts in its steelworks Thus, the average copper prices dropped throughout the world. by 3 % compared with 2007 ; those of lead and zinc fell by 19 % and 43 % respectively, However, worldwide nonferrous and precious compared with 2007. On the other hand, tin metals exploration budgets reached US$ improved its performances by posting an 13.2 billion in 2008, up 26 % compared with average of US$ 18 467 per tonne in 2008 2007. This sixth consecutive yearly increase against US$ 14 513 the previous year. Precious is accounted for by the unprecedented levels metals prices maintained their upward trend of global metal prices reached over the last started two years before and gold recorded years. 7 Office National des Hydrocarbures et des Mines Activity Report 2008 Worldwide exploration budgets $15 3,0 Relative Gold and Copper Prices (1989=1) $12 2,5 $9 2,0 (US$ Billion) $6 1,5 $3 1,0 $0 0,5 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Nonferrous Exploration Total Relative Copper Price Uranium Exploration Total Relative Gold Price Source : Publication of Metals Economics Group – November 2008.