Algeria's declaration on Saturday came a day after Morocco said chances of discovering profit-making oil in the kingdom were intact.

Morocco's own revelation about the possibility of discovering oil offshore followed an announcement by neighbouring Mauritania that it had found oil off its shores. 

Algerian Energy and Mines Minister Shakib Khalil said the decision was part of the country's plan to develop exploration of new wells to increase its production and export of oil and natural gas.

Managing Director of the Moroccan Office of Hydrocarbons and Mining (ONHYM), Amina bin Khadra, told La Vie-eco weekly that experts were "convinced the two adjacent offshores are similar geologically".

The identical geological make-up of the region could make prospecting at the Moroccan level conclusive, notably at the southern Atlantic offshore, she said.

The southern Atlantic offshores are still disputed by Morocco and the Algeria-backed Polisario Front, which wants to set up a separate state comprising Morocco's southern provinces (known as the Sahara).

This is the first time in decades Algeria will be exploring for oil in the western regions, close to the Moroccan border, and this has been made possible after the two countries promised to inaugurate a new era of cooperation after decades of strife.

A new prospect

King Muhammad (L) met
Butaflika in Algiers

This new era of cooperation was ushered in after a meeting between Algerian president Abd al Aziz Butaflika and King Muhammad VI of Morocco on the sidelines of the Arab summit, which concluded in Algiers recently. 

After the meeting, Algeria lifted entry visas on Moroccan citizens to its territories as a sign of goodwill and as a reciprocal measure to a similar decision by Morocco in 2004.

The two countries also exchanged ministerial visits, and Algerian Agriculture Minister Said Barkat is currently on a three-day official visit to Morocco.

Production

Oil and gas exports receipts in Algeria came close to $10 billion in the first quarter of 2005, up 37% compared with the same period of the previous year, Khalil said.

Algeria currently produces 1.3 million barrels of oil a day, well in excess of its Opec quota of 800,000, he added.

Oilfields in Morocco are still relatively untapped, with drilling not having reached 0.01 well per 100 square km, compared with the international average of 8 wells per 100 square km.

Morocco's oil imports and supply of oil stood at $ 2.6 billion in 2004, $260 million increase compared to 2003.

According to Moroccan officials, 15 international oil companies are currently prospecting in various regions of Morocco, with investments totalling 50 million euros.