Renewable Energies: SDX Energy Embarks on Major Project Focused on Morocco

The London-based energy company SDX Energy announced on November 27 a major reorientation of its corporate strategy under the leadership of its new CEO, Daniel Gould.

According to a press release from SDX Energy, The reorientation aims to transform the company from a traditional oil and gas supplier into an integrated hybrid player in the energy scene, particularly in Morocco, thereby becoming a key element in the region’s energy transition.

SDX Energy has decided to sell its Egyptian assets to concretize its new vision, a decision designed to unlock resources to fuel the growth of the company’s Moroccan operations and initiate the necessary funding to support the company’s new objectives.

The company emphasized its commitment to the Moroccan market by retaining its gas assets and seeking to expand its energy footprint.  With this in mind, SDX will operate on the fundamental principle of “doing more with what we have”.

The British company’s new strategy entails expanding its existing gas transmission infrastructure to facilitate gas imports from Spain via the Maghreb-Europe pipeline (GME), which will also contribute to diversifying gas supplies in the Kenitra region.

With over twelve years of expertise and presence in Morocco, SDX plans to capitalize on its past successes to establish an “innovative” business model, based on a gradual integration into the renewable energies sector.

SDX Energy’s roadmap includes three key elements, namely the expansion of existing gas transmission infrastructure to connect to the Maghreb-Europe pipeline (GME), the production and cross-selling of renewable energy, combined with existing gas off-take contracts, and vertical expansion into additional power generation initiatives.

To achieve these projects, SDX is planning additional drilling activities in 2024. Funding for these initiatives is scheduled via an advance payment agreement with the company’s main buyer, which testifies to the company’s long-term commitment to the Moroccan market.

It should be recalled that SDX signed a non-binding agreement with Dika Morocco Africa (DMA), a subsidiary of the Chinese company Citic Dicastal, concerning the prepayment of SDX gas deliveries to Morocco. Under the initial terms of this agreement, SDX received a prepayment of $1.9 million last October.

Another agreement, for a more substantial amount, is currently being negotiated between the two companies and is expected to be finalized, with funds released in early 2024, which will be allocated to finance a drilling program comprising several successive wells. SDX also announced the successful completion of testing operations on the Ksiri 21 well, which kicked off last September.

SDX noted that this type of program would “ensure operational efficiency, and prove sufficient reserves of ‘gas-behind-pipe’ to meet both existing and future demand”, adding that the well can be immediately put into production and supply gas to existing customers, as part of the gas price improvement announced on June 5, 2023.

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