Oil in Bemolanga: successful prospection, speculations on, no strings attached,

The prospection project of Bemolanga is one of the most developed projects in Madagascar. The french company TOTAL is about to make a final decision following encouraging results. “The two years long contract has been signed in 2008”, argued the OMNIS (National office of mines and strategic industries) general director. The discovery will be made official in August 2010 by the launching of the starting phase.  

“They drilled 130 wells of 100 to 200 m deep”, explained the OMNIS director, Valerien Lalaharisaina. “They did so in order to rate the present quantity of tar and oil in the ground”, he added. The prospection related expenses are supported by company bound to the Malagasy state. Thus, TOTAL has, so far, been investing 130 millions of dollars. Could the French company decide to continue prospection with a starting phase, as a breaking step for scale exploitation, investments will come up to 160 millions dollars.  

Prospection of this site started in… 1923. In 2010, expectations are definitely better. According to deeper prospection, 180 000 barrels per day would possibly be produced. This enormous capacity is the result of modernization of oil extraction tools. Bemolanga is being famed as the world’s current greatest ever oil reserve! The exploitation could last for more than 30 years.  

The production phase in Bemolanaga is meant to start in 2019. Prior to that, the installation of oil facilities will be taking no less than five years. The timing is perfect, since pressure on producing countries is going to be stepped up. Price increases are expected. The Bemolanga project would be profitable, could the barrel’s price remain over 80 dollars. 

Political speculation  

The speculations on the Malagasy oil are blossoming like weeds. The TOTAL group’s commitment is a strong signal. Previously “cast aside”, the French multinational purchased 60% of Madagascar Oil’s shares in 2008 and took control of Madagascar’s best rated oil fields. The group is planning to invest no less than 7 billions US$ in the corporation.  

TOTAL’s aggressive approach would have driven the former regime to play in defense. A big Malagasy group would have tried to enter the Bemolanga project by then, but TOTAL would have, naturally, locked the door. In the end, president Marc Ravalomanana would have started to step up pressure on oil companies by threatening to nationalize the distribution circuit, could they keep on joining hands about controlling prices.  

This threat would have been held as a reply to TOTAL. The ousted president recently accused the “Frenchies” of having triggered the putsch against him in  Madagascar while specifying that their target remains the country’s natural wealth. Although Marc Ravalomanana refrained from quoting any name, it is…TOTALLY clear! The Bemolanga related turnovers’ sharing scheme remains unknown. The Malagasy state represented by the OMNIS is supposed to get 40 to 70% of the turnovers, royalties and taxes being merely insignificant pocket money