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Morocco sees E&P contracts with Shell, Enterprise

Royal Dutch/Shell Group (quote from Yahoo! UK & Ireland: SHEL.L) and Britain's Enterprise (quote from Yahoo! UK & Ireland: ETP.L) are near exploration contracts with Morocco following the relaxation of Moroccan petroleum law, the head of the national office for exploration and production (ONAREP) said.

``We are discussing the contractual details for signing a very important oil agreement,'' Mohamed Douieb said of negotations with Shell.

In an interview with industry monthly Arab Oil and Gas, Douieb said Shell's exploration contract would be for the Cap Ghir Haute Me/Anza Haute Mer blocks and should be signed in late 1999 or early 2000.

He said Enterprise was negotiating a contract for the Cap Drea Haute Mer block.

British explorer Lasmo (quote from Yahoo! UK & Ireland: LSMR.L) was expected to reach an agreement with an American partner to share risk and extend an exploration contract on the Ras Tafelney block.

Amendment by Morocco of petroleum laws should attract further foreign investment, Douieb said.

``Some companies may be surprised by at the generosity of the new provisions,'' he said.

Morocco had reduced the maximum state holding in the event of a discovery to 25 percent from 50 percent. Exploration companies also now were exempt from corporate tax for 10 years from first production.

Morocco is an importer of crude and refined products and Douieb said energy purchases this year would cost the North African country almost one billion dollars.

ONAREP in September launched a new campaign to promote exploration acreage with industry presentations in London and Houston.

Douieb said companies were mostly interested in Moroccan Atlantic acreage where very little exploration has taken place.

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Morocco's airliner to buy planes worth $1.5 bln

Morocco's state-run airliner Royal Air Maroc (RAM) will launch an international tender before the end of the year to buy 20 aircraft, including Boeing and Airbus, a company director said on Wednesday.

``RAM will launch soon this year an international tender to buy from 2002 a total of 20 aircrafts worth $1.5 billion,'' the company's communications director Mourad Kanabi told Reuters.

``The date for the launch of the tender has not been set yet, but it will happen soon this year. It is within our 2002-2012 investment plan,'' Kanabi said.

He said RAM was ``especially looking in its new buy at Airbus A340, A321 and at Boeing 747 and 757.''

``We were very satisfied with our experience with Airbus planes when Egypt Air leased us some of its Airbus aircraft,'' Kanabi said.

European aircraft maker Airbus Industrie has been trying for a long time to break U.S.-based Boeing's monopoly on RAM purchases. RAM's total fleet of 31 planes were all supplied by Boeing.

The latest RAM purchase of Boeing aircraft was in February, when it signed a three billion dirhams ($306 million) deal for seven Boeing 737-700 and 737-800 aircraft to be delivered by 2001. Two 737-700 planes have already been delivered.

RAM serves 60 international airports spread across 40 countries.

The government, with a majority stake, plans to partially privatise RAM, in which Air France holds 3.9 percent and Spain's Iberia airline has 1.3 percent.

But no firm date has been set for the flotation of part of the government stake.

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SEMAFO Signs a Strategic Partnership Agreement and Completes a $44 Million Financing

SEMAFO is pleased to announce that it has entered into a strategic partnership agreement with MANAGEM, the mining subsidiary of Groupe ONA, Morocco's premier conglomerate. The agreement signed today contemplates the infusion by MANAGEM of $44M into SEMAFO's capital.

On the date of closing which is expected to be, at the latest, Dec. 15, 1999, MANAGEM must subscribe to 14 million voting and participating shares of Semafo at $1.15 each. To each share purchased is attached 1.5 warrant which may be exercised at any time before Nov. 1, 2001 for the first portion of 10,500,000 shares at a price of $1.25 for each share, and before Nov. 1, 2002 for the second portion of 10,500,000 shares at a price of $1.35 for each share. Warrants shall be exercised on the basis of Semafo's liquidity requirements and arising investment opportunities. This transaction is subject to approval by the regulatory authorities and SEMAFO's shareholders.

Both SEMAFO and MANAGEM have a significant presence in West Africa. The combination of their mining portfolios and technical and financial resources will create a major entity in the region. Moreover, the current status of the mining industry in general, and gold in particular, gives rise to exceptional consolidation through acquisitions. SEMAFO, with MANAGEM as a partner, thus positions itself to take full advantage of opportunities.

In close cooperation with MANAGEM, the current management intends to develop the company by way of acquisition. Indeed, it is envisaged, in line with SEMAFO's capital financing by MANAGEM, to implement in the next 24 months an acquisition program up to a maximum of $100 million and to become a major force in the industry.

So as to maximize the synergies between MANAGEM and SEMAFO, MANAGEM will appoint three directors to SEMAFO's Board; in addition, a strategic committee comprising two members appointed by each company will be formed with the mandate to examine, analyze and recommend all potential development and acquisition projects to the Board.

MANAGEM, Groupe ONA's mining subsidiary, has been active in mining exploration and operations in Morocco since 1928. Groupe ONA constitutes the leading Moroccan holding company with a turnover of CAD 2.6 billion, shareholders' equity of CAD 1.1 billion and employs over 15,000 people as at Dec. 31, 1998. Its shares are trading on the Casablanca Stock Exchange. To extend its growth basis, Groupe ONA plans to develop MANAGEM's activities on an international scale and elected this strategic partnership with SEMAFO to achieve its goal.

SEMAFO is a resource company exploring in West Africa. Two of its gold projects are presently at the feasibility studies stage. SEMAFO had more than $19 million on hand as at June 30, 1999.

(No regulatory authority has approved or disapproved the content of this release)

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Ericsson Wins Order Valued at $142 Million to Build New GSM System in Morocco

Ericsson is chosen as the principal supplier of a turnkey GSM network by Medi Telecom - the second GSM operator in Morocco. The order is initially valued at $142 million (Euro 135 million).

Medi Telecom recently won a license to operate the second GSM network in the country. The operator is jointly owned by a consortium - whose main shareholders are Morocco- based BMCE Bank, Afriquia Group, Telecom Portugal and Spanish-based Telefonica.

``Medi Telecom's new network will have a positive impact on the Moroccan economy. It will also create new opportunities for employment and the technological advancement of young people here,'' says Patrick Boyeaux, Managing Director of Ericsson Morocco.

The GSM system is to be delivered in January 2000. When fully expanded, it will provide nation-wide coverage. Current penetration of mobile phone users in Morocco is some 0.5 percent. The introduction of Medi Telecom's new network is expected to increase demand significantly in the next few years, by giving consumers advanced mobile services and a choice of operator.

With the global strength of Ericsson, Medi Telecom will bring the latest mobile technologies and services to Morocco, and be in a position to offer some of the latest applications, including datacom and IP-based services.

GSM is the world's most widely deployed wireless communications standard. Ericsson is the global market leader in GSM, with close to half of the world's 190 million GSM subscribers connected by Ericsson systems. More than 125 operators in some 70 countries around the world rely on GSM systems from Ericsson.

Ericsson is the leading provider in the new telecoms world, with communications solutions that combine telecom and datacom technologies with freedom of mobility for the user. With more than 100,000 employees in 140 countries, Ericsson simplifies communications for its customers - network operators, service providers, enterprises and consumers - the world over.

Moroccan expatriates' remittances to reach $2 billion

The overall 1999 remittances of Moroccan expatriates are expected to reach $2 billion, the Moroccan Banque Centrale Populaire (BCP) said. The amount will represent a 5.8 percent increase over 1998, the BCP said, adding that the remittances were above $200 million during the first three months of 1999. The Moroccan community settled abroad is estimated at 2 million souls. The BCP attributed the rise in remittances to the positive juncture in the European Union countries, where growth rate is to attain 2.4 percent.

Tangier free zone firm set up

Four Moroccan private enterprises set up a firm dubbed "Tangier Free Zone" (TFZ) to manage and promote the Tangier free trade area. The new firm was created by Banque Commerciale du Maroc (BCM), Banque Marocaine du Commerce Exterieur (BMCE) and the Societe Nationale d'Investissements (SNI) and the Compagnie Africaine. The zone is part of the Tangier-Boukhalf Project that stretches over 345 hectares (ha), the Moroccan Industry department said, adding that another 129 ha industrial zone is under construction. Part of its drives to consolidate the industrial infrastructure in the region, the department will create four industrial areas. The program is destined to endow investors with quality services and an adequate frame for conducting their industrial projects.



1999/2000 Budget Bill

The board of ministers has adopted the 1999/2000-budget bill which forecasts:

- A budget (expenses) of DH 141 bn, up 6.6% from 1998/1999. - Receipts of DH 125.3 bn, up 5.8% from 1998/1999. - A deterioration of 12.7% in public deficit to DH 15.6 bn. According to Treasury forecasts for GDP growth, (3% in 1999 and 5% for 2000), the 1999/2000 deficit will account for 2.8% of GDP against 3.1% in 1998/1999.

To note in this project : - The growth of 18.4% of debt service at DH 40.5 bn (interest + capital). - The slower growth of operating costs (3.4%) than ordinary expenses one (7.9%).

Mutual fund statistics

The volume of assets under management has increased by 31.7% since the beginning of the year at DH 35.9 bn, according to the last CDVM report of April 16th, 1999. Assets held by mutual funds break down as follow :

- DH 7.5 bn in equity or 20.9% of total assets under management. These assets increased by 9.6% since 01/01/99.

- DH 24.8 bn in bonds or 69.3% of total assets under management. These assets increased by 43.9% since 01/01/99.

Infrastructure/Financing Port Authority Gets New EIB Loan

The European Investment Bank awarded the Moroccan port authority (Office d'Exploitation des Ports - ODEP) a loan worth Euro 30 million (DH 317 million). This loan will be integrated in ODEP's overall development budget for the period 1999-2003 with the aim of modernizing the country's seaports. The loan will be reimbursed over a 14-year period with a 4-year grace period and at a 4% interest rate. The EIB loan will primarily focus on the upgrade of equipment and infrastructure in the top-8 ports in the country including the Jorf Lasfar port. ODEP will spend a total of DH 2.6 billion on port modernization and 64% of this spending will come from its own budget while the remaining will be obtained from various international funding such as the recent EIB loan.


Banque Populaire Joins Vivendi-SBC

The Moroccan bank Banque Populaire has joined the BMCI Bank and Mena Finance in the Vivendi-SBC alliance, a consortium of companies that seeks to acquire the second GSM mobile phone license in Morocco. At least half of the alliances competing for the license have included Moroccan banks which are expected to become shareholders in the future license. (An in-depth report will be released in the April 1999 issue of The North Africa Journal - Details will follow next week)


Insurance Broker Agma Buys Lahlou-Tazi

The newspaper L'Economiste reported last week that the insurance broker Agma has purchased the Lahlou-Tazi company. Some form of deal between the two organizations was rumored in the financial world in Morocco given the stock ownership of Financiere Diwen, which owned stakes of both Agma and Lahlou-Tazi. Trade/Textiles Morocco Earns DH 24 Billion in Textile Exports

The Moroccan textile and clothing industry has improved its exports in 1998. Export earnings from its European market exceeded DH 24 billion. Morocco is the first suppliers of women's clothing to France followed by China and Tunisia and is second in men's clothing behind Tunisia.

In the European Union, Morocco is ranked 16th supplier of textile products and clothing.


Bank merger

The board of directors of two local banks, the Banque Populaire of Tangier and the Banque Populaire of Tetuan have approved the merger of their institutions which will be named Banque Populaire de Tangier-Tetuan. The signing of the merger document is scheduled for May 28, 1999 and the new bank will be operational on July this year. The merger will create a small regional bank to be based in Tangier with a network of 31 branches covering six markets that are Tangier, Tetuan, Larache, Chefchouen, Asilah and Ksar El-Kebir.

Wafabank's capital increase

Wafabank will increase its capital. This operation of DH 203 m, is reserved exclusively to Banco Bilbao Vizcaya (BBV). The bank will create 185 000 new shares at DH 1 100 each, which is a premium of 14.2% from the bank's price (as of 04/23/99) on the central market.

Government Releases Reform Plan for Credit Populaire

The Moroccan government approved a reform plan aimed at repositioning the state-owned bank Credit Populaire du Maroc (CPM). The status of CPM will be entirely different once legislators approve the changes.

CPM is part of a network of financial and savings institutions comprising the Banque Centrale Populaire (BCP) and the 19 Regional Popular Banks (Banques Populaires Regionales-BPR). These BPR are supposed to play a dominant role in the Moroccan banking system as they control one third of resources and one fifth of the labor force. The 19 BPRs have a dense network across the country but they have not been able to fully function as a bank and have not gathered enough savings.

The proposed reform initiated by the government would greatly expand CPM's mission. The BPRs will gain autonomy and many have already merged in a consolidation pattern expected to speed up in the near future. The BPR will remain cooperatives but will also have an executive office and a surveillance board.

Today the state controls 90% of the BCP either directly or through the participation of other state-owned companies. But the proposed reform would allow the redrawing of the shareholding of the BCP so that the BPR would acquire half of BCP's stakes. The state would sell 21% of BCP to the Regional Popular Banks at a discounted price allowing them to access more capital and resources.

In addition, the state is expected to introduce 20% of BCP's capital in the Casablanca Stock Exchange but would limit buyers to acquire no more than 5%. This measure would allow the diversification of shareholders among the general public.


Car sales increased by 50%

According to the Cars Importers Association "l'Association des Importateurs de Véhicules Automobiles Montés" statistics, passenger cars sales increased by 50% during the first quarter of 1999 from the same period last year and economy cars by 22%.

Cement Sales

At end march 1999, cement sales reached 1.4 m tons vs. 1.6 m tons at the same period last year according to "l'Association Professionnelle des Cimentiers". Sales volume dropped by 9% this month after a slight rise of 0.7% during February 1999. Nevertheless, the association still forecasts a 5% sales growth this year vs. a drop of 0.4% in 1998.


Important measures for the labor sector

As Government Announces Important Measures The Moroccan Premier, Mr. Abderahman Youssoufi has announced last week that his administration will resume "social dialogue," a process that aims at creating a debate and consensus over labor issues among the main partners that are the labor unions, the administration and employers. The announcement made last week by Youssoufi stated that the government pledges to restore dialogue as defined by the agreement reached by all parties on August 1, 1996 which, according to Mr. Youssoufi, has cost some AD 7 billion which were mostly used in wage increases and career promotion within state-owned companies and the administration. The first meeting of the administration with other labor and corporate partners was held last week during a five-hour session.

The government has made some major announcements to appease the labor world. Fifteen measures were announced after the meeting which include the raising of the ceiling of non-taxable income for individuals from DH 18,000 to DH 20,000. This measure is expected to cost the treasury some DH 480 million. The government spokesman said that 2% of the state investment budget would be used for social and low-income housing. This measure was part of the agreement made during the August 1996 negotiations but has never been implemented. A national fund for low income housing will be established to manage these investment funds including the financial participation of the private sector which is called to contribute with 3% of its profit and 1% of wages. A number of other measures related to social and low-income housing were included in the list.

Among the other announcements made by Youssoufi's spokesman was the raising of the minimum retirement allowance to DH 500. Although this measure was made official in August 7th, 1996 by a Royal order, hundreds of thousands of retirees continue to receive payments worth less than DH 500. The government also said that it intends to force all state employees to join the social security and protection system. It said that this is a first step towards the generalization of medical coverage (universal coverage). In more specific cases the government agreed to reserve DH 640 million to be allocated to Jerrada mines. DH 750 million will also be used to fund job creation among Morocco's youth.

At the end of the meeting, the government announced the constitution of a commission in charge of monitoring the dialogue to insure that it continues. The new commission is expected to meet and establish a work program and define steps for negotiation sessions both at the national and industry levels. The commission hopes to start a nationwide debate on the issues of internal career promotion and seasonal and temporary workers. Another commission known as the "commission of wise men" will debate the most difficult issues that are subject of conflicts (Commission des Sages). This "Commission des Sages" will be comprised of the heads of the three labor unions, the ministers involved in the negotiation process and the head of the employer confederation CGEM.







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