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OIL EXPLORATION OPPORTUNITIES

Explore oil exploration opportunities in Madagascar, the third-largest island, with vast petroleum potential in multiple basins. Learn about OMNIS agency's role, regulations, and the country's energy landscape.

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OIL EXPLORATION OPPORTUNITIES

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  1. MADAGASCAR OIL EXPLORATION OPPORTUNITIES OMNIS2005. 1

  2. MADAGASCAR MALAGASY REPUBLIC • Third largest Island in the World • Southwest of Indian Ocean • 400 km off the coast of east Africa • Length:.......1600 km • Wide:..........600 km • Surface:......520 000sq.km2 • Climate: 2 seasons • Dry from April to September • Wet & Warm from to October to March OMNIS2005. 2

  3. MADAGASCAR • Capital: Antananarivo • Population: 18 millions • Languages Malagasy and French • Administrative Division 6 Provinces subdivided in 22 Regions OMNIS2005. 3

  4. MADAGASCAR • CONSTITUTIONAL CHARTS • Executive • President of the Republic, Chief of State • Government: Prime Minister, and Ministries • Legislative • National Assembly:Deputies elected at universal suffrage • Senate: Senators , 1/3 designated by the President of the Republic and 2/3 elected by the big electors. OMNIS2005. 4

  5. MADAGASCAR • Judiciaries • Supreme Court • High Court of Justice • High Constitutional Court OMNIS2005. 5

  6. MADAGASCAR • Infrastructure Roads: 49 827 km Railways: 963 km Port: 3 internationals; 8 secondaries and 6 for the coasting navigation Air-port: 116 with 4 internationals • Communications and Informations Modern networks (phones, email, fax) Private Companies management OMNIS2005. 6

  7. MADAGASCAR • Economy of market: Export of agricultural and textile products Import of furniture and equipment for the industries • Tourism: New destination for the tourists Ecological Tourism (protected fauna and flora) OMNIS2005. 7

  8. MADAGASCAR • Energy Electricity generated by the hydro-electrical or thermal station Firewood and charcoal for domestic use Oil and Gas Needs to import refined products Consumption of oil: 15,000bbl/day Refinery’s capacity: 740,000m3 of crude oil/year OMNIS2005. 8

  9. MADAGASCAR • Regulation of Oil Industry under the Ministry of Energy and Mines and functions of Government • Upstream sector management by Office des Mines Nationales et des Industries Stratégiques (OMNIS) • Downstream sector management by Office Malgache des Hydrocarbures ( OMH ) OMNIS2005. 9

  10. MADAGASCAR General Managing Mining Division Societies Hydro-carbons Financial Logistics New ventures Exploration Data Center OFFICE FOR NATIONAL MINING AND STRATEGIC INDUSTRIES • OMNIS • InAntananarivo • Creation in 1976 • State-owned agency managing in petroleum and mining development • 350 employees • 1/3 highly qualified • Management team with many years of international experience Human resources OMNIS2005. 10

  11. MADAGASCAR ROLE OF OMNIS • Tasks: • Assess and develop petroleum resources • Promote private sector investment in petroleum exploration and production • Monitor oil companies activities • Holder of all oil exploration data • Undertake their own projects (maps) OMNIS2005. 11

  12. MADAGASCAR OMNIS2005. 12

  13. MADAGASCAR PETROLEUM EXPLORATION • 320 000 sq km (123,550 sq miles) of ON & OFFSHORE dividedinfive,suchas : • THREE mainsedimentary basins : • AMBILOBE • MAJUNGA • MORONDAVA • TWO other smaller basins : • CAP STE MARIE in SOUTH • ILE STE MARIE in EAST COAST OMNIS2005. 13

  14. MADAGASCAR PETROLEUM EXPLORATION (cont’d) • Efforts concentrated in these three basins due to the existence of two giant exhumed oil fields in the northern part of Morondava basin • For the three main basins: • common geological history related to rifting & drifting of Madagascar from Africa & India • The last two basins, smaller than these three, still unexplored OMNIS2005. 14

  15. MADAGASCAR PETROLEUM POTENTIAL • Source rocks distributed from Paleozoic to Mesozoic • Each tectono-sedimentary event corresponds to good reservoir rocks • Reservoirs sealed by interbedded shale and limestone OMNIS2005. 15

  16. MADAGASCAR • PETROLEUM POTENTIAL (cont’d) • Both structural and stratigraphical trappings can be encountered in each tectono-sedimentary sequence • Hydrocarbon shows, tar sand and heavy oil accumulations attest hydrocarbon generation • Geochemistry and basin modeling suggest the time of maturation and the oil migration history OMNIS2005. 16

  17. MADAGASCAR STATUS OF OIL EXPLORATION Geophysical surveys . 71,000 km of 2D seismic . 3,600 km² of 3D seismic . 195,000 km of aeromag . 11,000 km of micromag . 33,000 km of magnetism . 87,000 km of gravity OMNIS2005. 17

  18. MADAGASCAR • STATUS OF OIL EXPLORATION • (cont’d) • Exploration wells : 75 wells • 1 in onshore Ambilobe Basin • 8 in Majunga Basin (2 offshore & 6 onshore) • 65 in Morondava Basin (6 offshore & 59 onshore) • 1 in offshore East Coast OMNIS2005. 18

  19. MADAGASCAR STATUS OF OIL EXPLORATION (cont’d) • Some shows: • For oil: • 4 wells :Mnbl-1; Mdz-1: 41°API(Morondava basin) ; MRV-1 (Majunga basin) & MAL-1 (East Coast basin) • For gas: • 1 well in Majunga Basin ( Vanco permit, Mar-1) • 4 wells in Morondava Basin ( Va-1; Ep-1; WMnbl-1 & SK-1) OMNIS2005. 19

  20. MADAGASCAR CURRENT STATUS OF EXPLORATION ACTIVITIES Four Companies operating in Madagascar (10 Contracts) • VANCO Group (Vanco – ExxonMobil – Hydro) in Majunga offshore deep water, 1 PSC • Madagascar Oil Sarl (MOS), an affiliate of Vuna Energy, 6 PSCs in onshore OMNIS2005. 20

  21. MADAGASCAR CURRENT STATUS OF EXPLORATION ACTIVITIES (cont’d) • Sterling Energy Ltd in Ambilobe and Ampasindava offshore,2 PSC • ExxonMobil in Cap Saint Andre offshore, 1 PSC • TGS-Nopec in Speculative Survey in west and south offshore of Madagascar OMNIS2005. 21

  22. MADAGASCAR Current Promotion • Malagasy basins divided in blocks : Off and On-Shore • Promote West & South Off-Shore (in Spec. Survey) divided in blocks for a maximum size 1900 square km for each block • General petroleum interests for this promoted offshore (speculative survey will be started in August ) OMNIS2005. 22

  23. MADAGASCAR LEGAL AND CONTRACTUAL FRAMEWORK OMNIS2005. 23

  24. MADAGASCAR • Hydrocarbon upstream activities is governed by petroleum law • OMNIS representative of the state and admnistrator of the National Mining Domain of Hydrocarbons • “Societe nationale” in charge of all petroleum activities • OMNIS entitled to act on behalf of the “Societe nationale” until its creation OMNIS2005. 24

  25. MADAGASCAR • CONTRACT TYPES • Any type of petroleum contracts may be applied • But two alternatives specially forseen: • Production Sharing Contract (PSC) • Joint Venture Contract (JVC) OMNIS2005. 25

  26. MADAGASCAR • Production Sharing Contract • Mining Titles granted to OMNIS • Company responsible for all petroleum costs • Cost recovery  65% of available production ( total production – royalty) • Profit Oil (available production – petroleum cost) shared between OMNIS and Oil Company according to sliding scale based on r factor • r = x/y • x = company’s cumulative gross revenue • y = company’s cumulative gross expenditure • Another formula could be adopted OMNIS2005. 26

  27. MADAGASCAR • Joint Venture Contract • Mining Title held jointly by OMNIS and the contractor company • Percentage of participating interest set by negociation • Company responsible for all petroleum costs • Recovery cost set by negociation OMNIS2005. 27

  28. MADAGASCAR • MINING TITLES • Grant by the President of Republic • Three separate Mining Titles: • Exploration Mining Title: 8 years with 2 years extentions • Exploitation Mining Title: • . Oil 25 years • . Gas 35 years • 5 years extentions • Transportation Mining Title: • . Oil 25 years • . Gas 35 years OMNIS2005. 28

  29. MADAGASCAR • FINANCIAL DISPOSITIONS • Exploration Period: • Work Program subject to a bank guarantee • Local needs shall be covered by foreign currency • Exploitation Period: • Proceeds of petroleum’s sales may be retained abroad OMNIS2005.29

  30. MADAGASCAR • FISCAL TERMS • Royalty (sliding scale principle) • Direct tax on hydrocarbon (income tax): • rate:30% OMNIS2005. 30

  31. MADAGASCAR Royalties Oil Production tranche (Bl/d)Rate Q  25000 8% 25000 <Q  50000 10% 50000 <Q  75000 12% 75000 <Q 100000 14% 100000<Q 130000 17% Q >130000 20% Gas Production tranche (MCu.M/D) Rate Q 12000 5.0% 12000 <Q  24000 7.5% Q > 24000 10.0% OMNIS2005. 31

  32. MADAGASCAR • Custom Duties: • Exploration Period: • Regime of temporary tax and customs exemption for material and equipment used in petroleum operations • Exploitation Period: • Duty free for all material and equipment used in development operations and the first installation exploitation units OMNIS2005. 32

  33. MADAGASCAR • Environmental Protection • Company shall : • comply with Environmental provisions stipulated in the Environmental Chart, and • undertake Environmental Impact Study OMNIS2005. 33

  34. MADAGASCAR • Legislation and Jurisdiction • All activities related to hydrocarbons are governed by malagasy law • Arbitration • Pursuant to rules of the International Center for Settlement of Investment Dispute (ICSID) OMNIS2005. 34

  35. MADAGASCAR • Contractual Terms • Work Program: • Minimum Exploration Work Obligations and Expenditure established by negociation with reference to: • Length of exploration periods • Prospectivity and size of acreage OMNIS2005. 35

  36. MADAGASCAR • Admnistration Fees • during Exploration Period us$..…../km2/year according to each phase • Bonus of Production • set by negociation OMNIS2005. 36

  37. MADAGASCAR CONCLUSION AND CHALLENGES • Numerous play concepts in : • Majunga Basin : shallow and deep off & onshore basin • Morondava Basin : passive margin - shallowkarroo • Cap Sainte Marie : shallow & deep offshore • East Coast Basin : shallow & deep offshore • Amending the Petroleum Law • Exploration data for consultation and / or for sale OMNIS2005. 37

  38. MADAGASCAR THANK YOU OMNIS2005. 38

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