Madagascar, the island nation off the east coast of Mozambique, boasts rich mineral deposits, and for a few years in the mid-2000s it attracted attention from foreign investors, such as Total, Exxon Mobil, and Rio Tinto, all looking to get a share in the unexplored potential of the island and its waters.
Then in early 2009, after months of protests and political tension, President Marc Ravalomanana stepped down, ceding power to Andry Rajoelina, the leader of the High Transitional Authority opposition party. Rajoelina was then named the new president in what very much resembled a military coup.
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The political instability in Madagascar had unsettled many investors, and the coup proved to be the final straw. Exxon Mobil decided to announce a force majeure in Madagascar, closing down all operations, as it looked to avoid any further problems, and wait to see how the political and investment environment would unfold under a new government and leader.
Now, four years later it seems as though Exxon Mobil is happier with the situation in Madagascar, and has announced its success in the obtainment of extensions to its three production sharing licenses, which Rajoelina signed in July. Exploration activities will now once again resume at the Ampasindava, Majunga, and Cap St. Andre licenses offshore Madagascar.
The people of Madagascar are in the process of determining their next president, and it is hoped that this general election will end the political crisis that began four years ago, helping to rebuild investor confidence, and bring much needed cash to the poor country.
In the company statement released on Wednesday, Exxon Mobil confirmed that "the affiliates intend to resume exploration work and environmental assessments for shore-based and offshore operations in preparation for deepwater drilling."
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Madagascar actually has no proven hydrocarbon reserves as of yet, but the fact that it shares a maritime boundary with Mozambique, where huge natural gas reserves have been discovered, gives explorers high hopes.
Exxon Mobil Exploration and Production Ltd. operates the Ampasindava PSC license, with a 70% stake whilst Sterling Energy holds the other 30%. It also holds a 100% stake in the Cap St. Andre license, and a 50% stake interest in the Majunga license, with BG International taking 30%, PVEP 10%, and SK Innovation 10%.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also… More