Preparations are on track by Madagascar's national oil company, the Office des Mines Nationales et des Industries Strategiques (Omnis), for a late September bid round for deepwater acreage in the Mozambique Channel, off central and southern Madagascar. The area has been divided into blocks covering 650 sq miles (1,700 sq km) each and companies will be allowed to bid on single or multiple blocks.
If all goes as expected, awards of production sharing agreements (PSAs) in water ranging from 650 ft to 9,850 ft (200 m to 3,000 m) in Morondava basin will mark the opening of Madagascar's second deepwater exploratory hot spot.
International interest is on the rise, too, offshore northwestern Madagascar. Subsidiaries of Vanco (the operator), ExxonMobil and Norsk Hydro are working together in the Majunga basin on a 6,081-sq-mile (16,000-sq km) block in 3,280 ft (1,000 m) to 9,850 ft of water under a PSA signed with Omnis in March 2001. In July 2004, OMNIS awarded Sterling Energy 100% interest in two license areas covering a combined 13,130 sq miles (34,000 sq km) in the northern Majunga basin and the Ambilobe basin.
Data acquisition by TGS-Nopec Geophysical Co. (TGS) concluded the end of January on a 6,395 line mile (10,300 line km) multiclient 2-D seismic survey in the Morondava basin and French waters in Mozambique Channel. Plans call for data processing to be wrapped up by the end of April, allowing prospective bidders about 5 months to pore over the comprehensive integrated data packages being assembled.
Early indications from data quality checks are that the deep waters of the western Morondava basin contain structures of both size and frequency adequate to support significant deepwater exploration. The design of the seismic survey just concluded was based on results of a 1,340 line mile (2,158 line km) reconnaissance survey acquired over the area in 2002 to confirm hints of hydrocarbon potential derived from vintage 2-D seismic data and logs from shallowwater wells drilled in the 1970s.
Frontier prospecting service
In addition to providing seismic data, interpreting the seismic data, integrating geophysical data with pertinent well-
control information and compiling bid documents, TGS also has helped Omnis prepare for the bid round by reviewing Madagascar's petroleum law and terms of its PSA and helping update them to make the bid round more competitive with other oil and gas exploration opportunities available around the world. The company is helping Omnis officials organize and host informational seminars. Preparations for Madagascar's bid round have been underway for the past 3 years.
Omnis opened the Morondava Basin licensing round in late October 2004. Plans call for seminars to be held in London and Houston early this year to preview the bid round and the acquired geophysical data. Companies will be required to purchase 25% of the available seismic data in order to participate in the licensing round. Omnis plans to close bidding on Sept. 25 and anticipates awarding acreage soon thereafter.
Madagascar presently produces no crude oil or natural gas commercially. But according to Omnis, hydrocarbon surface seeps and the multibillion-barrel Bemolanga tar sand accumulation have attracted numerous exploration campaigns since early in the 20th century - none, however, in Madagascar's sector of the deepwater Mozambique Channel.
Building on vintage data
Majunga basin has been the scene of four main phases of exploration, which resulted in the drilling of five wells onshore and two wells offshore and acquisition of 5,480 line miles (8,830 line km) of seismic data onshore and 8,200 line miles (13,200 line km) of data offshore.
Six wells were drilled in shallow water near the current Morondava licensing area during two exploration programs, one in 1970-71 and the other in 1985. The wells confirmed that sandstones of Tertiary, Cretaceous, and Jurassic ages are present.
The Morondava basin in the Mozambique Channel is a pure frontier area, with virtually no drilling at all between Mozambique's outer continental shelf (OCS) and the OCS of Madagascar.
TGS compiled about 21,735 line miles (35,000 line km) of old seismic data acquired in the Morondava basin and onshore nearby to learn about the geology of the area. The vintage data sets lacked useful information about deep reserve potential, so for the new
2-D survey, the company recorded data equivalent to about 9 miles (15 km) below the water surface.
The vintage seismic also hinted at some big structures, at least one of which modern seismic data have confirmed to be a 37-mile (60-km) long anticline.
When combined with available gravity data, the 2002 reconnaissance data also confirmed the existence of a 5.6-mile to 6.2-mile (9-km to 10-km) thick sedimentary section deposited in 1 mile to 1.5 miles (2 km to 2.5 km) of water within a failed rift zone that lays midway between the Davie ridge - the eastern boundary of Madagascar's deepwater bid round acreage - and the west coast of Madagascar, 125 miles to 185 miles (200 km to 300 km) to the east. Reservoir rocks of Jurassic and Cretaceous age are inferred.
To acquire the new data for the bid round, the acquisition vessel used by the seismic company towed a 5-mile (8-km) streamer with geophones positioned every 82 ft (25 m). An air gun array fired every 123 ft (37.5 m) to provide the sonic signal for the shoot. Acquired data are partially processed on the acquisition vessel to enable the organization to confirm its quality while still on location.
Appeal of related factors
As global oil and gas exploration activity ramps up in response to high wellhead prices, the deepwater acreage coming up for bid in Morondava basin can boast qualities not often associated with a promising frontier exploration area.
Although there is no conclusive proof that they are related in any way to the geology of the deepwater Morondava Basin, the multibillion-barrel Bemolanga and Tsimiroro heavy oil sands and tar seeps prove that the area has an active petroleum system - an essential characteristic for successful exploration.
In addition, the exploratory activity in Majunga and Ambilobe basins also is offshore of western Madagascar, just north of TGS' Morondava survey area. Last summer, operator Vanco and partners ExxonMobil and Norsk Hydro acquired 1,410 sq miles (3,657 sq km) of 3-D seismic data in the deepwater portion of their Majunga basin block, marking the first ever acquisition of 3-D seismic data in East Africa. Since then, ExxonMobil has taken a block west of the Vanco acreage and has farmed in on the Sterling Energy acreage in northern Majunga basin and the Ambilobe basin.
One factor contributing to the appeal of Omnis' upcoming deepwater Morondava bid round is the marketing flexibility allowed by Madagascar's relative ease of access to oil-hungry economies both in Asia-Pacific and the Americas. If big discoveries are made, could Madagascar end up playing an important role in the future supplying fast growing economies in the Asia-Pacific?
After dealing with explorationists for many decades - admittedly without success, as yet - Omnis, the government and the Malagasy are easy to deal with. The country's hydrocarbon fiscal, commercial and legal terms also are quite friendly, and - unlike West Africa - there still is room for an oil company to acquire a large piece of real estate.
Both the Malagasy government and the top officials of Omnis - including Omnis Director General Elisa Razaka, Assistant Director General Joeli Valerien Lalharisaina and Director of Hydrocarbons Ignace H. Randrianasolo - have been very cooperative with the contractor and have attended meetings and conferences to help promote their country as well as the bid round. Razaka is to make a presentation in April at an African petroleum forum in London. She and her colleagues have experience working with oil companies large and small and are very motivated for more oil companies to go to Madagascar.
Madagascar's economy is predominantly agrarian, and its people continue to be caught in the grip of grinding poverty. Madagascar imports energy to fulfill its needs. Because it is a very poor country, today's high energy prices are a burden on its budget. So if hydrocarbons are discovered, they will be sold into both domestic and foreign markets.
Unemployment is high, yet nearly 50% of Malagasy are educated, and many indigenous people are trained as mechanical engineers, chemical engineers, geologists and oilfield technicians.
If the promise of the 2002 reconnaissance seismic data is verified by the recently completed 2-D survey, the Morondava basin could extend far offshore to the west and be a target for significant deepwater oil and gas exploration well into the 21st century.

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