Petroleum Africa
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Monday, June 27, 2011
The dispute between Madagascar Oil and the government over the Tsimiroro Block has been settled. The company said the long running dispute has been settled and the government has acknowledged the validity of its PSC for the block.
Last year the government of Madagascar indicated to the company that it was conducting an audit of the Tsimiroro Block, which led Madagascar Oil to declare a force majeure on the block in an effort to safeguard its rights under the PSC in response to an “act of state”, in this case the threat of expropriation made by the government.
The company filed a request for arbitration for breach of contract by the government and OMNIS, the state regulatory agency responsible for overseeing the country's oil and gas operations. Since that time, the company was actively engaged with the Ministry of Mines and Hydrocarbons (MMH) and OMNIS to settle the dispute.
Now that the dispute has been settled Madagascar Oil has been able to get its 2011-2012 work program and budget approved. The company’s right to exercise its option for a two-year extension to the PSC in August 2012 was acknowledged by the government, allowing certainty in extending the contract term to August 2014.
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