Madagascar oil auction scheduled for October 2010

Feb 09, 2010 01:00 AM

Madagascar's auction of 50 offshore Indian Ocean oil blocks is likely to proceed in October this year after months of political turmoil delayed the process, a senior official said. The auction has been postponed due to a military-backed coup on the island last year, but Joeli Lalaharisaina, acting director general of the Office of National Mines and Strategic Industries (OMNIS), said it would happen this year.
"I'm confident that this auction will be held (this year) despite the political situation... as most companies are carrying on with their activities, but to be realistic, it will be in October," he told on the sidelines of an Africa energy conference. The sale of exploration rights will see the number of 2,000 sq km offshore blocks available rise from 6 to more than 50.

Lalaharisaina said there was no evidence of commercial oil finds in Madagascar yet, but this was expected to change soon.
"We are very optimistic that in the next two years we will have proof that there are commercial finds in Madagascar," he said. He said France's Total remained on target to start producing heavy oil at the onshore Bemolanga oil field by 2019 and Houston-based Madagascar Oil, which sold the Bemolanga stake to Total, could see production by 2015 at a second heavy oil project at Tsimiroro.

Lalaharisaina also said that his agency expects to start issuing mining licences in early 2011.
"It will probably happen in January," he said.

Lalaharisaina said there would be no review of existing mining contracts, as feared by some investors. Decision making on future mining licences will remain under OMNIS and not go to the mining ministry.
"There will be no review of the existing mining contracts... the government has realised that all was in place... so (the discussions) are off the table," Lalaharisaina said.

Source / Reuters
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