Source: Forbes Johnston on Flickr.

While Freeport-McMoRan's (NYSE:FCX) mining operations span the globe, its newly acquired oil and gas assets are concentrated in America. That's about to change. Starting in 2015, the company will drill its first few exploration wells offshore of Morocco. With an estimated 3.3 billion barrels of oil equivalent resource potential in its exploration permit area and Brent based pricing, Morocco could be a key growth area for the company in the future. Let's take a closer look at the company's prospects in North Africa.

A new frontier awaits
Freeport-McMoRan picked up its position in Morocco when it acquired Plains Exploration & Production last year. Plains had paid $15 million in cash as part of a farm-in agreement with a joint venture partner in the Mazagan permit area offshore Morocco. As part of that agreement, Plains agreed to fund 100% of the costs to drill two wells up to a maximum amount of $215 million. Those wells are expected to both be drilled next year. So far, Freeport-McMoRan has identified eight total exploration projects that could be drilled in the future.

Freeport-McMoRan has already secured the rig to drill those first two wells. The company is basically sub-leasing an Atwood Oceanics (NYSE:ATW) rig that is under a long-term agreement with Kosmos Energy (NYSE:KOS). Under the rig share agreement, the Freeport-McMoRan joint venture has been assigned two slots by Kosmos to use the Atwood rig to drill. The first well will be drilled in January, with the second well expected to be drilled in the second half of 2015. 

Source: Atwood website. 

Big risks remain
While the farm-in and rig sharing agreements will both reduce some of the risk Freeport-McMoRan is taking in Morocco, this is still a pretty risky bet at this stage. Just last month, a well drilled by Cairn Energy and Genel hit oil, but it wasn't a good quality reservoir. The well encountered a column of heavy-oil that's more complex to commercially exploit. While the acreage of Cairn and Genel is farther south from Freeport's, it does highlight the risk that Freeport could come up empty in its attempt to unlock Morocco's vast oil riches.

That being said, Morocco is drawing the attention of big oil because of the massive resource potential. Both Chevron (NYSE:CVX) and BP (NYSE:BP) have signed agreements for exploration areas offshore Morocco. Chevron acquired three offshore exploration blocks last year, while BP acquired a stake in three blocks that are operated by Kosmos. So, while offshore exploration in Morocco is in the early stages, it does have some of the best exploration companies in the world working to find and extract its oil. That's really important for Freeport-McMoRan, as the exploration blocks of Chevron and BP are adjacent to its exploration block, so it can keep an eye on how these exploration experts develop those blocks.

Investor takeaway
Right now, Morocco represents long-term upside for Freeport-McMoRan investors. While it's a risky bet in one regard, the company is taking a less risky route by farming-in the exploration block and signing a rig sharing agreement instead of signing a long-term rig contract. The bottom line here is that investors should tune in next year to see if Freeport's early wells are successful, as well as keep an eye on what peers like BP, Kosmos and Chevron have to say as these companies explore for oil in Morocco.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.