Madagascar sees ‘significant upgrade’ in oil estimate

12 September 2011, Sweetcrude, Antananarivo- Madagascar Oil, the US independent, has seen a “significant upgrade” in the oil-in-place estimate at an operated block in Madagascar.

The company is now looking at some 1.69 billion barrels of contingent original oil-in-place at the Tsimiroro field on Block 3104.

The new best estimate is a 75% leap on the previous estimate of 965 million barrels. The lower estimate has moved from 644 million barrels to 1.1 billion barrels where the high estimate has shot from 1.41 billion barrels to 2.5 billion barrels.

The estimates represent a large turnaround in fortune for Madagascar Oil which only began trading in London in November before suspending trading the following month as Madagascar’s government approached it about buying its 100% stakes in four onshore blocks, including 3104.

In March the company declared a force majeure under four production sharing contracts for Blocks 3104, 3105, 3106 and 3107 and in April filed a request for arbitration for breach of contract by the government and the country’s regulatory agency Omnis.

The situation was resolved in June. In July Total and Madagascar won an extension to a licence on a block on shore Madagascar. The licence is situated in Block 3102 and covers the Bemolanga project in the Morondava basin in Madagascar. The extension means the two companies can now chase conventional as well as heavy oil.

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