Genel Energy and its partners will plug the SM-1 well, drilled in the Sidi Moussa Offshore permit, pending further evaluation of the area, the Moroccan Office of Hydrocarbons and Mining (ONHYM) said on Thursday.
ONHYM said in a statement the well was drilled to a total depth of 2,825 metres and that while oil was encountered, tests failed to produce a continuous flow.
Genel’s partners in the permit are Serica Energy, San Leon and ONHYM itself.
Genel, which owns a 60 percent interest, said last October it had discovered oil in the SM-1 well, giving a boost to the region whose oil and gas drilling results have been mixed.
“Further evaluation of the well results and geological and geophysical data are required before any definitive conclusion can be drawn,” ONHYM said.
At 1440 GMT, Genel’s shares were down 3.2 percent at 795.5 pence.
Morocco has awarded dozens of permits to oil companies in the past few years, helped by its relative stability compared with other North African countries and by increasing indications of potential offshore and onshore reserves.
It has attracted companies such as Chevron, Cairn Energy and BP. BP was the latest oil major to enter Morocco, announcing a deal with Kosmos Energy this week to take a share in three offshore blocks. Drilling will begin later this year.
(Reporting by Aziz El Yaakoubi; Editing by Jason Neely and Mark Potter)
