HYDROCARBONS SECTOR IN MADAGASCAR Acreage, Ventures and Opportunities

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1 REPUBLIC OF MADAGASCAR Presidency s Department in charge of Mines and Petroleum HYDROCARBONS SECTOR IN MADAGASCAR Acreage, Ventures and Opportunities by Jacqueson Cécilien RANASY General Secretary

2 SUMMARY I-Organizational structure II-History III-Acreage - Ventures IV-Opportunities V- Going Forward

3 I-ORGANIZATIONAL STRUCTURE Ministry : Presidency s Department in charge of Mines and Petroleum : (political and legislative role) Regulatory Agency: OMNIS (new structure in progress) National Oil Company (to be established)

4 OPERATIONS II-HISTORY : Start of petroleum activities by a US Oil Company : Drilling operations set up by the French company SERP, (Syndicat des Études et Recherches Pétrolières) : Operations set up by the Société des Pétroles de Madagascar (a subsidiary of ELF), : Exploration activities by Chevron, Agip, Total, Conoco and other international companies on the west coast 1976 to date: More intensive exploration works by international oil companies (Amoco, Madagascar Oil, Tullow Oil, Exxon Mobil, Total, OMV, )

5 LEGAL AND INSTITUTIONAL FRAMEWORK Before 1975 Legal framework Type of Contract Authority : Mining Code : Concession : Mining Service Since 1976 Legal framework Type of Contract Authority : Petroleum Code : PSC : OMNIS* * under the authority of the Ministry in charge of hydrocarbons: currently the Presidency s Department in charge of Mines and Petroleum)

6 III-ACREAGE - VENTURES

7 Basins Overview Sedimentary basins representing a prospective exploration target with over 800,000 km2. 56 onshore (51,000 km2) and 270 offshore (380,000 km2) petroleum blocks. 17 onshore and 6 offshore blocks granted. 16 IOC operating in 23 petroleum blocks Much of the acreage is underexplored and opportunities are there

8 Madagascar: Petroleum Blocks Onshore exploration is more advanced than offshore. There are many unlicensed blocks offshore. These will be made available through bid rounds Unlicensed Blocks (yellow)

9 Exploration Wells & Proven Petroleum Systems 9

10 Madagascar Oil : Success Story Tsimiroro Block 3104 The Tsimiroro Field is a giant heavy oil reservoir 60 Km North-South, 5-10 Km East-West Stock Tank Oil Originally In Place Netherland Sewell 2011 Contingent Resources Base Case Billion Barrels Oil In Place Declared Commerciality of Block 3104 Tsimiroro Field on 8th May, Development plan was already agreed by the Gouvernement. Tsimiroro Steam Flood Pilot has showed some success in 2013/2014. The challenge is to ensure this success continues into the future. More geological understanding is required to know if all of the Tsimiroro Field is suitable for steam injection When the field is developed, this will be the first oil production in the history of Madagascar a new industry Information from Madagascar Oil

11 IV - OPPORTUNITIES

12 IV-OPPORTUNITIES Madagascar: An Underexplored Opportunity: Presence of at least 4 active petroleum systems and all the requirements for hydrocarbon accumulations Madagascar still under-explored: one oil well per 10,800sq km Encouraging petroleum potential according to recent discoveries of gas and light oil in the oil province of East Africa & Onshore activity. Madagascar in full exploration phase

13 Data The Malagasy Authorities are working with Data Providers* to attract investment and to target the underdeveloped opportunities. Modern Multi-Client data covers much of the onshore & offshore and the unlicensed blocks. We hope that companies use these data to target opportunities and then come to invest in Madagascar *TGS, BGP, Spectrum, CGG.

14 Morondava: Highlights Offshore Madagascar has the potential for widespread Jurassic to Early Cretaceous source rocks.* These are modelled as mature for oil within the Morondava Basin. * This is an attractive undrilled frontier on which to focus in * From TGS

15 Global Reserves of Unconvetional Oil

16 Madagascar as a New Frontier Conventional & Unconventional Opportunities More oil and gas has been discovered in East Africa in the last few years than in any other region in the world Source: Deloitte "the most dynamic recent developments in the African natural gas sector have been in East Africa, Source: Ernst & Young Significant gas reserves have been found in Mozambique and Tanzania, where LNG facilities are now been planned. Drilling will kick off in Ethiopia later this year, while Madagascar is believed to hold significant reserves Source: Jacinta Moran, Platts (7/12/12)

17 OPPORTUNITIES IN THE DOWNSTREAM SECTOR The global value chain and the upcoming energy needs of the oil activities implies opportunities in these downstream areas : Petroleum product importation, transport, storage Gas importation, transport, storage, distribution Lub importation, distribution Petroleum product exportation Refining Madagascar downstream sector remains a very promising with high potential for investment in conjunction with upstream activity.

18 V GOING FORWARD

19 A FARSIGHTED AND INVESTMENT-FRIENDLY OIL POLICY GUIDELINES: Property rights to oil and gas resources lie with the State The Development of oil & gas resources requires the active participation of international oil companies with appropriate technical and financial capacities Oil and gas activities are to be carried out in a sustained and transparent manner.

20 A FARSIGHTED AND INVESTMENT-FRIENDLY OIL POLICY OBJECTIVES Develop an institutional framework suitable for the development of oil activities while preventing any conflict of interest. Develop legal and contractual framework guaranteeing the rights and security of investments of the oil companies as well as the State s interests. Manage efficiently the hydrocarbons revenue. Improve environmental management in sensitive or protected areas, through a specific regulatory framework. Ensure that oil activities contribute to national and local development; Build knowledge about potential of oil resources to achieve optimum production as well as its efficient management. Develop national expertise and capacity on hydrocarbons

21 New Petroleum Code Code is under review now Stakeholder Consultation Progressing: Government Department Industry Stakeholders Parliamentary Approval Expected by July 2015 New bid round to follow in late 2015

22 Events in Madagascar Salon International des Mines et des Hydrocarbures September 2015 To promote extractive industries in Madagascar Minerals Mining Hydrocarbons For Sponsorship & attendance details, please see: IGM : Institute of Gemmology of Madagascar Institute has a accreditation from the «Gem-A» body of London. Provides training at many levels in Gemology For information, please see

23 THANK YOU