London-based oil and gas player Energean is continuing to drill an appraisal well at its gas field in the Lixus license located 40 km off the coast of Morocco in the Atlantic Ocean. While the drilling operations are still underway to evaluate deeper appraisal and exploration objectives, the London-listed player explains that the preliminary analysis indicates volumes found in the well are lower than pre-drill estimates. As a result, the firm is now focusing on completing the Anchois-3 drilling activities and ongoing technical evaluation.
Energean enlarged its footprint in the Mediterranean region in April 2024 with a new country entry, enabled by partnership agreements with Chariot to take over the operator role at two Moroccan offshore licenses, covering the Lixus offshore license (Lixus), where the Anchois gas development project is located, and the Rissana offshore license (Rissana). Afterward, Stena Drilling was hired on a one-well firm assignment at the Anchois gas field with the flexibility to drill an additional option well in Morocco. Energean (45% stake, operator), alongside its partners Chariot (30%) and ONHYM (25%), started drilling the Anchois-3 appraisal well using the Stena Forth drillship in August 2024.
According to Chariot, the preliminary interpretation indicates the presence of gas-bearing reservoirs in the B sands, which is an appraisal objective of the well, thus, further detailed work will be needed to understand the impact of these results. Previously, Energean anticipated significant upside potential and value from the prospective resources in the pilot hole and main hole targets, which were estimated to have the potential to increase the resource base to over 1 trillion cubic feet (tcf,) fueling the firm’s hopes of moving toward a final investment decision (FID) quickly.
Disappointing Discoveries
While the drilling operations are still underway to evaluate deeper appraisal and exploration objectives, the London-listed player explains that the preliminary analysis indicates volumes found in the well are lower than pre-drill estimates. This news comes as a disappointment for Energean, which had previously expressed optimism about the potential of the Anchois-3 well to significantly increase the resource base.
The company is now focusing on completing the Anchois-3 drilling activities and ongoing technical evaluation. This approach highlights the importance of a data-driven decision-making process in the oil and gas industry, even when initial expectations are high.
Looking Ahead
Despite the setback at Anchois-3, Energean remains active in the region, with ongoing projects in Israel, as confirmed by the FID for the Katlan development project. This project is expected to involve a capital expenditure of approximately $1.2 billion and will be developed in a phased approach through a subsea tie-back to the existing FPSO Energean Power, which currently serves the Karish and Karish North developments. The first gas production is expected in the first half of 2027.
Energean is also navigating the complexities of the Middle East, acknowledging the growing concerns of further escalations in the region. This highlights the geopolitical challenges faced by the oil and gas industry, which are further amplified by the ongoing conflict in the region. The company underlines the security risks faced by essential infrastructure systems, such as the FPSO Energean Power, which may be targets for missile fire and sabotage operations.
“While the Karish field has continued to produce in line with guidance and with no disruption to its production since the start of the conflict, any event that impacts production from this field could have a material adverse impact on the business, results of operations, cash flows, financial condition and prospects of the Group,” underlined the London-listed player.
Impact on Morocco’s Energy Sector
The disappointing drilling results at the Anchois-3 well have implications for Morocco’s energy sector. The country has been seeking to develop its offshore gas potential to reduce its dependence on energy imports and bolster its position as an emerging player in the global energy market. The Anchois-3 well was seen as a crucial part of this strategy, with the potential to provide both domestic energy supplies and export opportunities. While the initial results are discouraging, it remains to be seen how this will impact Morocco’s overall energy strategy.
The update on the Anchois-3 well comes amid heightened interest in North Africa's offshore gas potential. Morocco’s stable political environment and its strategic location near Europe make it an attractive destination for international energy investments. With Europe searching for alternative energy sources to reduce reliance on Russian gas, projects like Anchois have gained attention for their potential to contribute to regional energy security.
However, the disappointing results at Anchois-3 serve as a reminder that exploration and development in the oil and gas industry are inherently risky. While Morocco has a strong potential for offshore gas, further exploration and development will be crucial to realize its full potential.
Final Thoughts: Morocco’s Energy Odyssey Continues
The Anchois-3 well represents a crucial step in Morocco’s journey toward energy independence and a more diversified energy portfolio. While the initial results may be disappointing, it is important to note that the exploration and development of new energy resources is a complex and long-term process. Morocco remains committed to developing its energy sector and will continue to pursue opportunities in offshore gas and other renewable energy sources to secure its energy future.
