The recent signing of licensing agreements for blocks off Madagascar by two U.S. companies could rekindle exploration interest in the area, said Marex Inc., a Houston consulting firm that acted as intermediary on both contracts.
In two unrelated transactions, Xpronet Inc. and Frontier Resources International Inc., both based in Houston, signed 1-year contracts with Madagascar's petroleum-granting authority, Omnis. Each company's licensing agreement is for two 2-block areas off Madagascar see map [57,905 bytes].
Xpronet's license, consisting of Blocks A and B, is in the Mozambique Channel off western Madagascar and extends into water as deep as 3,000 m. The two blocks cover about 35 million acres.
Frontier Resources unit Frontier Marine Inc.'s license covers about 32 million acres and consists of Blocks C and D, which also extend into 3,000 m of water.
Under the terms of the agreements, each company will conduct geological and geophysical studies during the first year. The companies then have a 3-year optional extension, during which they are to conduct seismic tests. Depending on the results of the seismic tests, drilling projects may follow.
"(Both) companies are proceeding slowly and cautiously," said Marex.
According to Marex, all four blocks are believed to contain Mesozoic through Tertiary petroleum systems-including all elements of an oil and gas occurrence, from source to trap-similar to those found in the North Sea. These systems are believed to be prone to oil and gas, said the firm.
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