AFRICANGLOBE – Though Malagasies are likely to remember 2013 as the year of long-awaited presidential elections, it is also the year when the Madagascar started producing oil.
Madagascar Oil, an AIM-listed company, started producing heavy crude at its Tsimiroro plant in early 2013.
The company is still in the “huff and puff” stage – whereby steam is injected to channel oil towards the well – but it plans to reach full-scale production by mid-year.
“We do not know how the oil will respond,” says Paul Ellis, Madagascar Oil’s chief executive.
In January, the company – one of 17 that hold a licence in western Madagascar – negotiated a fundraising package of $78.4m with its shareholders, which should see it through to 2014.
If production proves viable, it will need around $1.5bn to develop the field.
“With an internationally recognised government and in the light of the recent discoveries in Mozambique, Tanzania and Kenya, we expect a rush of international oil and gas companies in Madagascar,” says Bonaventure Rasoanaivo, director of the Office des Mines Nationales et des Industries Stratégiques.
There are many offshore blocks, but just three onshore blocks, left to be licensed
By: Emilie Filou