Chariot Limited strikes gas deal with Vivo Energy to fuel Morocco’s industrial boom

In an exhilarating development for Morocco’s energy sector, Chariot Limited (AIM: CHAR), an Africa-focused transitional energy group, proudly announced a pivotal Heads of Terms agreement with Vivo Energy. This landmark agreement outlines a visionary strategy to harness natural gas for Morocco’s burgeoning industrial energy demands, showcasing a potent blend of domestic gas commercialization and cutting-edge midstream compressed natural gas (CNG) initiatives.

At the heart of this transaction is the Loukos Onshore licence in Morocco, where Chariot, holding a 75% operatorship, alongside ONHYM’s 25% stake, aims to transform the energy landscape. With Chariot’s recent completion of its first drilling campaign at the OBA-1 well, and subsequent plans for flow test operations, the company is poised to update its resource potential based on fresh data from its latest seismic reprocessing

Vivo Energy, a leader in the pan-African fuel and lubricants market with a robust footprint in Morocco, is set to spearhead the construction and operation of a CNG plant and a virtual distribution network. This network will cater to both existing and emerging industrial customers across Morocco, leveraging Vivo’s extensive service station network of over 400 locations.

Under the terms of the agreement, Chariot is slated to provide initial gas volumes of up to 3 million standard cubic feet per day (mmscfd) to the midstream CNG business, derived from the anticipated future production at Loukos. Additionally, this midstream venture will operate through a special purpose vehicle (SPV), granting Chariot up to a 49% stake, thus offering a dual revenue stream from both upstream production and midstream gas distribution.

Pierre Raillard, Chariot Morocco’s Managing Director, expressed enthusiasm about the partnership’s potential to expedite the commercialization of Loukos’ gas resources. “This collaboration with Vivo Energy not only aims to bolster our joint capabilities but also to propel the development of Morocco’s gas infrastructure to new heights,” Raillard commented.

Matthias de Larminat, Vivo Energy Maroc’s Managing Director, highlighted the strategic alignment of this project with Morocco’s decarbonization goals, underscoring its significance in meeting the industrial sector’s escalating energy requirements.

While the transformation of the Heads of Terms into fully termed documentation remains uncertain, the progression towards detailed agreements is underway. This initiative promises to be a game-changer in fulfilling Morocco’s industrial energy needs and driving environmental sustainability through reduced carbon emissions.

The Chariot-Vivo agreement is more than just a business deal; it’s a strategic endeavor that could set a precedent for the energy sector in Africa and beyond. By integrating upstream gas production with midstream distribution capabilities, Chariot and Vivo are crafting a model that could be replicated across regions striving for energy independence and environmental sustainability.