Madagascar’s oil and gas industry received a blow last week when thousands of demonstrators, demanding a new government, hit the streets and set fire to an oil depot.
The trouble erupted when the government closed a radio station belonging to the opposition party whose leader, Andry Rajoelina, said two protesters were killed in the affray.
President Marc Ravalomanana had earlier accused Rajoelina of promoting the government’s overthrow and declared that the government would act decisively to “restore order” on the Indian Ocean island off southeastern Africa. The opposition radio station soon went off the air.
The altercation came just weeks after Sino Union Petroleum & Chemical International Ltd. told shareholders that it expects to see oil production “very soon” from its primary onshore oil and gas block in Madagascar.
Sunpec’s success
In addition to the eight wells it already has drilled on the island, Sunpec said it planned to drill three more on Madagascar’s Block 3113 during this year’s first quarter. That’s not a surprising decision since all eight of Sunpec’s earlier wells showed oil and gas.
Sunpec is hardly the only company to have an interest in Madagascar. Indeed, in December last year, Houston-based Madagascar Oil boosted its estimate of reserves at its Tsimiroro project on the Indian Ocean island by 30% to 1.7 billion bbl. In March, the company said it produced Madagascar’s first oil in 60 years from an onshore steam injection pilot project at Tsimiroro, one of two heavy oil projects the firm is developing.
“The company was able to explore 16 of the 27 new structures identified by an independent evaluation and had a 75% exploration success rate,” said Madagascar Oil’s chief executive officer, Alex Archila.
The company said 12 of 17 exploration wells drilled on the Tsimiroro Block yielded discoveries indicating 900 million-1.4 billion bbl of oil in place.
Estimates confirmed
It said another six appraisal wells confirmed its previous estimate of about 300 million bbl elsewhere on the block. Tsimiroro’s oil gravity is about 14° API, it said, and it responded well to being heated by steam injection.
The private firm says its other project at Bemolanga, also in northwest Madagascar, is one of the biggest undeveloped bitumen reserves in the world, with an estimated 9.8 billion bbl of oil reserves.
In September, French oil giant Total signed an agreement with Madagascar Oil to operate the Bemolanga license with a 60% interest. Reports surfaced a month later that Total also would be interested in taking a share of Sunpec’s Block 3113.
It was a rumor that Sunpec hotly denied, saying Total had no involvement in the project at the moment and that Sunpec had “no intention” of cooperating with Total on the development of Block 3113 in the future. There’s probably more to those riots than the shutdown of a radio station.
