Junior explorer Madagascar Oil reported Thursday that it has been awarded a 25-year 'Development Mining Title' for the Block 3104 Tsmiroro production sharing contract by the President of Madagascar.
The firm said the transaction is "a significant and major step forward" for it, representing the first production sharing contract to enter into a development phase in Madagascar.
The title award covers the entire 2,480 square miles of Block 3104, including the Tsimiroro Main Field with its 1.7 billion barrels of oil contingent resource base as well as appraisal activities of conventional light oil potential in the Tsimiroro South and Tsimiroro Deep South areas.
The award will allow Madagascar Oil to proceed with the development of Block 3104, including development drilling and facilities upgrades to build upon existing production. It will also enable the firm to progress further active discussions that it has been holding with strategic partners to assist in funding the development. Meanwhile, it allows Madagascar Oil to undertake the domestic sale of production from the Stream Flood Project – including the 100,000 barrels of oil currently in storage.
Madagacar Oil CEO Robert Estill commented in a company statement:
"We are delighted to have reached this significant milestone in the growth of Madagascar Oil. Being the first company to reach the development phase within Madagascar is a truly exciting opportunity, both for us as a company, but more importantly for the people of Madagascar.
"We are grateful to the Government of Madagascar for their extensive and constructive contribution to this process and the strong working relationship we have built as a result. As a company, we believe we have a dual responsibility, not simply to generate value for our shareholders but also to lead the way in developing Madagascar's significant natural resources that will benefit the whole country."
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