Exploration activities in Madagascar   Future Plan for the Petroleum Law

Madagascar is located in the Southern hemisphere 400 km off the nearest of east africa coast, crossed by Capricorn tropic between 10°S and 28°S latitudes. Mainly of agricultural country, Madagascar offers many opportunities for extractive industries such are chromites, ilmenite and nickel and cobalt. In fact, with a total acreage of ab out 592,000 km2, Madagascar sedimentary basins cover the. Of the land extended off the coast line to the economic exclusive zone. The entire sedimentary basins lay about 690,000 km2.

Facing the energy crisis reflected by the exponential rising of the oil price nether seen before, one barrel costs about $100 US, image of the decreasing of the conventional oil reserve, Madagascar through OMNIS, is reviewing its upstream petroleum policy, by arranging its PSC, amending its petroleum law and offering new criteria for the block awarding. In fact, due to this evident crisis, petroleum companies as well are changing their policy in re-orienting the oil exploration to
the frontier petroleum provinces, and to the unconventional hydrocarbon development. As no commercial hydrocarbon accumulation has been encountered so far, despite of the intensive investment carried by major and independent companies since the beginning of the exploration, Madagascar is classified among the frontier zones.

Besides these facts, we remind that through its geology and all the basin modeling carried out, Madagascar oil potential remains true. At least three petroleum systems are proven based on the three main source rocks:
• The Middle Sakamena shale which has sourced the Triassic reservoirs of bemolanga, tsimiroro and Manandaza
• The Toarcian shale prolific source in outcrop would have expelled oil since Middle Jurassic time and
• The upper Jurassic to Neocomian abandonment shale modeled as the origin of the oil which would have filled the upper. Cretaceous deep water regressive sand systems.

FUTURE PLAN FOT THE PETROLEUM LAW

The future plans of the petroleum code contain five major points:
• Revision of the petroleum Code based on the former PSC, amendment and or changes will be done if deemed
• As far as time table is concerned, two items must be done:
· Revision from December 2007 to March 2009
· Presentation of the Bill during the first session of the National
Assembly on May 2009
• The principal amendments in the new PSC consists in:
· Additional definitions
· Additional annexes for PSC (Joint Operating Agreements between participants, Parent company guarantee)
· The Operator regime
· Improved sole risks article
· Improved article on unitization
· New article on decommissioning
· Improved participants’ obligation
• Identification of provisions that need to be inserted into the Petroleum Code and into the PSC
• Work done is not definitive, the Petroleum Code will be improved and be enhanced to the international standard, the PSC will be readjusted again restriction.

EXPLOITATION ACTIVITES PETROLEUM BLOCK RESIZING
For these last 5 years, through TGS Nopec, OMNIS had carried 12,508 km of speculative 2D seismic surveys.
About 6,000 km2 of these lines were run in the Mozambique channel covering Madagascar territorial sea. The remaining were acquired in Majunga and Ambilobe basins for ExxonMobil group. Based on the mega structure along the Davie ridge  and showing very thick sediments, which had been mapped from existing and new acquired seismic lines, OMNIS had  esized its petroleum blocks, based on latitude and longitude coordinates: one block covers 2,000 km2. This resizing is started by the offshore open blocks:
• Morondava basin : 6 blocks are split into 99 blocks
• The Cap Sainte Marie, in the Southern of Madagascar: the block is extended in surface and spilt into 94 blocks,
• The East coast, contains 23 blocks, 22 of which are in an environmental restriction.
• Cape d’ Ambre a newly defined basin based on its Indian conjugates, the petroliferous Combay and Bombay basins, has 23 blocks.

BLD ROUND LAUNCHING
Before 2006, 16 blocks, offshore and onshore were awarded, then based on available data and TGS Nopec newly acquired 2D seismic, 2 bid rounds were launched in 2006. The first one consisted in the onshore basin: 9 blocks on 10 nominated were awarded. The second is related to the offshore from 239 blocks, 19 blocks defining 2 PSC: 9 blocks for Belo offshore awarded to Marex / Roc Oil and 10 blocks for Grand Prix granted to ENERMAD.

COMPANY ACTIVITIES
Related to non conventional hydrocarbons:
• Tar sand project in Bemolanga block, 13 core drills were performed for reserve evaluation. In geophysics domain, electromagnetic and aeromagnetic surveys were carried out
• Heavy oil project: the setting of the pilot unit is in process and G&G and 3 core drills were performed. Related to the conventional hydrocarbons, since 2006, seismic 2D surveys have been carried out : 177 km by MAS in South Majunga Block (2103), based on 350 km of gravity, 174 km seismic lines in Manja block (3108) by AMICOH.

Madagascar Petroleum International holding Sakaraha block (3113) acquire 567 km of 2D seismic through vibroseis and Madagascar Energy International has acquired 9222 gravity points and 425 magnetic points in Bekodoka block (2104). Both companies are affiliated to SUNPEC.
MOS on Manambolo, Morondava and Manandaza blocks and Tullow Oil in Mandabe and Berenty blocks are performing G&G studies. Tullow has performed some aeromagnetic survey; and preparing a seismic operation. The companies to which the 9 blocks were awarded after the first bid round are at their first phase, constituting mainly to the data compilation and the starting of the G&G. These companies with their respective blocks are :
• EAX/CANDAX Ambilobe block (1101)
• MADAGASCAR NORTHERN PETROLEUM : Antsohihy block (2101)
• WILTON PETROLEUM : Marovoay block (2102)
• ESSAR : Melaky block (3103), Morombe block (3110) Mahafaly block (3115)
• TULLOW OIL : Berenty block (3111)
• MADAGASCAR SOUTHERN PETROLEUM : Tuléar block (3112)
• PETROMAD : Bezaha block (3114)

Offshore
In ambilobe block (1002) held by the joint venture ExxonMobil and Sterling Energy seismic reinterpretation from 10100km of 2D lines. As well sea bed coring, heat flow measurement and G&G have been performed. In Ampasindava block (2001c) held by the joint venture ExxonMobil and Sterling Energy; 3025 km of 2D seismic were acquired. One prospect has been mapped.
Based on 3651 km of 2D lines and 3488 km2 of 3D seismic, 2 prospects and 2 leads with some inboards are mapped by ExxonMobil in Majunga deep water block, held by the consortium ExxonMobil, British Gas, Sk and PetroVietnam. In addition, heat flow measurement and sea bed coring are performed. In Cap Saint André block (2002) held by ExxonMobil, there are 2800 km of newly acquired seismic lines. In addition, heat flow measurement and G&G were performed in this block. The exploration activities in the newly awarded areas are at an early stage, and consist mainly of data compilation and G&G.
Wells could be drilled this year in On and Offshore zones. Facing the energetic crisis, even within a frontier province, Madagascar has reoriented its upstream petroleum policy, by bringing some change in its PSC and its Petroleum Code.
The pilot unit related to the heavy oil project setting is in process.  As far as the exploration activities are concerned, 20 were granted to oil companies. The activities are focused mainly on seismic operations.
The new companies selected from he last bid round are still in data compilation and/or G&G stages. After the block resizing, bid round was also launched for the offshore blocks. Two companies won blocks. They are now compiling data.
From 6,676 km2 of 2D seismic and 3,488 km2 on 3D seismic, 3 prospects and several leads have been mapped in offshore Majunga Basin. Wells could be drilled this year in On and Offshore areas.