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Friday, April 17, 2015
Madagascaar Oil confirmed the award of the Development Mining Title for its Block 3104 Tsimiroro PSC by the president of Madagascar, Hery Rajaonarimampianina. The award follows a joint proposal by the Ministry of Mines and Petroleum and OMNIS on April 15.
Approval for the development allows Madagascar Oil to proceed with development of the Block 3104 Tsimiroro asset; including development drilling and facilities upgrades to build on existing production. The green light also progresses Madagascar Oil’s bid to bring in strategic partners to assist in funding the development.
The company said it also paves the way to undertake the domestic sale of production from the steam flood project (SFP), including the 100,000 barrels of oil currently in storage. Sales are expected to commence this quarter.
The initial Tsimiroro crude to be developed under Phase 1 is a heavy oil, with target markets both in Madagascar and internationally for power generation, as a heavy oil refinery feedstock and as marine bunker fuel. Phase 1 of the Tsimiroro DP is intended to first fully develop the geological compartment containing the existing SFP area. It is planned that long-lead orders will be placed for drilling under Phase 1 of the TDP, and SFP facilities upgrade equipment/materials for the planned work program to commence in late-2015. An additional geological compartment will be developed, intended to enable sales volumes to reach up to 10,000 bopd.
The president also approved an amendment to the Block 3104 PSC, which redefines it into two separate areas, the Tsimiroro Main Field in the northern section of the block and the southern area (Tsimiroro Southern Area). Madagascar’s SFP is located on the Tsimiroro Main Field.
The Block 3104 PSC amendment also sets out certain obligations in relation to annual submission of work programs and budgets for the Block 3104 PSC. This includes commitments to appraise structures in the Tsimiroro Southern Area, including Tsimiroro Deep and Deep South, through seismic acquisition in 2016 with drilling on the deeper horizon potential following in 2017 and 2018, depending on prospectivity. These structures have the potential to yield light oil from deeper horizons as indicated by well results from exploration drilling in Block 3104 and Block 3107 to the immediate south. The new agreement also sets out certain relinquishment obligations for the Tsimiroro Southern Area.
Operationally, the company’s SFP area continues to demonstrate consistent production performance with all wells operational and consistent steam generation and injection achieved. The first of a series of planned Development Evaluation Wells was drilled and cored successfully in February 2015 using the Madagascar Oil drilling rig. This will be followed up with a continuous drilling program, commencing in Q2 2015.
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