Morocco predicts oil bonanza

King Mohammed will welcome the much needed oil revenues

By Nick Pelham

King Mohammed VI has visited the site of Morocco's first major oil discovery at Talsinnt in the politically-charged east of the kingdom, near the frontier with Algeria.

The Moroccan energy minister, Youssef Tahiri, who accompanied him, said the discovery would allow Morocco to be self-sufficient in energy for up to 30 years.

Mr Tahiri also predicted further discoveries, but the size of the reserves are significantly lower than previously published estimates.

However, whilst small, the find is a huge boon for a country which alone in North Africa lacked its own oil and gas.

Elsewhere in the region, all price hikes are cheered.

No immediate respite

In Morocco, with the lowest growth rate in the region, they send depressed markets still lower.

There will be no immediate respite, according to Mr Tahiri; pumping at Talsinnt will not begin before 2003.

But there are likely to be more imminent benefits.

Mr Tahiri said the American exploration company Lone Star was expected to increase its investment close to the troubled Algerian border to $1bn.

The investment is large and American, and will boost international confidence in the region's long-term stability.

Only a year ago, the Algerian leader, Abdelaziz Bouteflika, warned Morocco to stop sheltering Islamist militants after an attack on the Algerian side of the border.

Foreign consultants also advised that international investment in impoverished eastern Morocco was conditional on a resolution of the border dispute with Algeria and the conflict over Western Sahara.

But investors have judged oil worth the risk.