Gulfsands Petroleum abandons Moulay Bouchta Petroleum Agreement

The decision was taken even after the licence, which focused on an oil prospective area identified to the east of the depleted Haricha oil field, enabled Gulfsands to identify new lead concepts with gross recoverable prospective resources internally estimated at 149m barrels of oil.

As a result, according to the company the Office National des Hydrocarbures intends to call in $1.75m worth of restricted cash held as performance guarantees under the Moulay Bouchta contract.

After having expired on 20 June 2017, Gulfsands had received an offer from the Office National des Hydrocarbures et des Mines to extend the initial phase of the contract from three to four years through to June 2018.

However, the decision to pursue the contract in Morocco hinged on finding an appropriate partner to help take the project forward, the company said, with the outfit having clearly stated that Morocco was "non-core" to the group's business strategy.

Failing that, it had concluded not to continue discussions on the extension of the Moulay Bouchta contract.

Separately, Gulfsands announced that $6m of restricted cash held as performance guarantees under the Rharb and Fes Petroleum Agreements, which expired in 2015, were "inappropriately" taken and retained by the Office National des Hydrocarbures, and that it was asking for their return.

The funds were to help the company finance remaining work that its subsidiaries had outstanding in Morocco.

John Bell, managing director said: "Our clearly stated strategy continues to be to focus capital and management resources on the Levant region and to manage down the non-core parts of our business. Today's important and necessary decision is another key step towards achieving that goal"