FOR HYDROCARBON EXPLORATION MADAGASCAR NEW OPPORTUNITIES FOR HYDROCARBON EXPLORATION General profile OMNIS presentation Hydrocarbon prospectivity Oil exploration status Current promotion Legal & contractual

MADAGASCAR GENERAL PROFILE Third largest Island Southwest of Indian Ocean 400 km off the coast of east Africa Length :.........1600 km Wide :.......... 600 km Surface:......592 000km2 Climate: 2 seasons Dry & cool from April to September Wet & warm from October to March

GENERAL PROFILE (cont’d) MADAGASCAR GENERAL PROFILE (cont’d) Capital: Antananarivo Population: 18 millions Languages: Malagasy and French

GENERAL PROFILE (cont’d) MADAGASCAR GENERAL PROFILE (cont’d) ENERGY Electricity generated by the hydro-electrical or power station using fuel Firewood and charcoal for domestic use Oil and Gas Needs to import refined products Consumption of oil: 15,000bbl/day Refinery’s capacity: 740,000m3 of crude oil/year

GENERAL PROFILE (cont’d) MADAGASCAR GENERAL PROFILE (cont’d) Regulation of the oil industry by the Ministry of Energy and Mines Upstream sector managed by Office des Mines Nationales et des Industries Stratégiques (OMNIS) Downstream sector managed by Office Malgache des Hydrocarbures ( OMH )

OFFICE FOR NATIONAL MINING AND STRATEGIC INDUSTRIES MADAGASCAR OFFICE FOR NATIONAL MINING AND STRATEGIC INDUSTRIES GENERAL MANAGING Cabinet Division Hydrocarbon Division Mining Resources & Radioactive Mineral Division Development & Support Division Patrimony & Human Resources Division Administrative & Financial Division

OFFICE FOR NATIONAL MINING AND STRATEGIC INDUSTRIES MADAGASCAR OFFICE FOR NATIONAL MINING AND STRATEGIC INDUSTRIES (cont’d) Creation in 1976 State-owned agency for oil and mineral resources 300 employees 1/3 highly qualified with years of international experiences Role in oil industry Managing the national mining for hydrocarbon sector Holder of exploration hydrocarbon data

hYDROCARBON PROSPECTIVITY MADAGASCAR hYDROCARBON PROSPECTIVITY 636 185 sq km from Onshore to Exclusive Economic Zone (EEZ), Madagascar divided into five basins : Ambilobe Basin Majunga Basin East Coast Basin THREE main sedimentary basins : AMBILOBE: 32 000 sq km MAJUNGA: 146 285 sq km MORONDAVA: 296 600 sq km Morondava Basin TWO other basins : CAP STE MARIE in SOUTH: 133 000 sq km EAST COAST: 28 300 sq km Cap Ste Marie Basin

HYDROCARBON PROSPECTIVITY (cont’d) MADAGASCAR HYDROCARBON PROSPECTIVITY (cont’d) The three western basins onshore and offshore : Efforts concentrated in these basins due to the existence of two giant exhumed oil fields in the northern part of Morondava basin Common geological history related to rifting & drifting of Madagascar from Africa & India The last two basins, entirely offshore, still unexplored

HYDROCARBON PROSPECTIVITY MADAGASCAR HYDROCARBON PROSPECTIVITY (cont’d) Presence of all criteria for oil accumulation in Madagascar Mature source rocks Reservoir rocks Traps Seals Maturation of the Kerogen

MADAGASCAR STATUS OF EXPLORATION Geophysical surveys 71,000 km of 2D seismic 3,600 sqkm of 3D seismic 195,000 km of aero magnetism 11,000 km of micro magnetism 33,000 km of magnetism 87,000 km of gravity

STATUS OF EXPLORATION (cont’d) MADAGASCAR STATUS OF EXPLORATION (cont’d) Exploration wells : 75 wells 1 in onshore Ambilobe Basin 8 in Majunga Basin (2 offshore & 6 onshore) 65 in Morondava Basin (6 offshore & 59 onshore) 1 in offshore East Coast 1 well / 8500 sq km

STATUS OF EXPLORATION (cont’d) MADAGASCAR STATUS OF EXPLORATION (cont’d) Hydrocarbon shows Outcrop: Bemolanga tar sand Tsimiroro heavy oil Oil and gas shows: 65 % of wells drilled The most important light oil shows in Majunga, Morondava and East Coast basins Gas shows found in both Majunga and Morondava basins

STATUS OF EXPLORATION (cont’d) MADAGASCAR STATUS OF EXPLORATION (cont’d) Five Companies operating in Madagascar (10 Contracts) VANCO Group (Vanco – ExxonMobil – Norsk Hydro) in Majunga offshore deep water. Madagascar Oil Sarl (MOS), in onshore Morondava basin Majunga Oil Sarl (MAS), in onshore Majunga basin

STATUS OF OIL EXPLORATION (cont’d) MADAGASCAR STATUS OF OIL EXPLORATION (cont’d) Sterling Energy Ltd in Ambilobe and Ampasindava offshore. ExxonMobil in Cap Saint Andre offshore. TGS-Nopec: Speculative Survey in west and south offshore of Madagascar

MADAGASCAR Current Promotion open blocks based on the available Promote the onshore and the offshore open blocks based on the available data and the petroleum concepts Promote in particular the Mozambique channel facing Morondava basin and South Madagascar Plateau till the EEZ.

MADAGASCAR Current Promotion The offshore open blocks (Cont’d) The offshore open blocks The Mozambique Channel facing Morondava basin containing : thick sedimentary sequence on the Davie Ridge trapping system controlled by possibly salt tectonic and also related to Madagascar southeastward drifting)

Current Promotion (cont’d) MADAGASCAR Current Promotion (cont’d) The Madagascar Plateau constituted by the southward continuation of Madagascar : relatively shallow Karroo and thick Mesozoic sequence; The East coast basin: thick post Middle Turonien sequences shown through seismic lines and MAL 1 well For both, few data

Current Promotion (Cont’d) MADAGASCAR Current Promotion (Cont’d) 2D speculative seismic survey carried out in late September in offshore Morondava basin and Madagascar plateau. Shooting 9000 km of lines OMNIS will launch a bid round in year 2006. Average size of blocks:1900 square km Maximum of 3 blocks per contract

LEGAL AND CONTRACTUAL FRAMEWORK MADAGASCAR LEGAL AND CONTRACTUAL FRAMEWORK Hydrocarbon upstream activities governed by petroleum law OMNIS, representative of the state and administrator of the National Mining Domain of Hydrocarbons “National Society” in charge of all production activities OMNIS entitled to act on behalf of the “National Society”

LEGAL AND CONTRACTUAL FRAMEWORK MADAGASCAR LEGAL AND CONTRACTUAL FRAMEWORK (Cont’d) Exploration & Production operations governed by contracts, Production Sharing Contract (PSC) Joint Venture Contract Non negotiable terms Exploration period : 8 years & 2 years extension upon justified request Production period : Oil 25 years ; Gas 35 years & 5 years extension Royalties (sliding scale) Income tax : 30%

LEGAL AND CONTRACTUAL FRAMEWORK MADAGASCAR LEGAL AND CONTRACTUAL FRAMEWORK (Cont’d) Mining titles granted by the President of Republic Three separate Mining Titles: Exploration Mining Title Exploitation Mining Title Transportation Mining Title Legislation and Jurisdiction All activities related to hydrocarbons are governed by Malagasy law

CONCLUSION AND CHALLENGES MADAGASCAR CONCLUSION AND CHALLENGES High prospectivity of all open blocks with respect to oil accumulation criteria: Numerous trap systems Wealthy source rocks Density of wells = 1/8,500sqkm

CONCLUSION AND CHALLENGES (Cont’d) MADAGASCAR CONCLUSION AND CHALLENGES (Cont’d) Enhancement of the prospectivity by speculative seismic survey over Madagascar Exclusive Economic Zone The Mozambique channel The Cape Sainte Marie extended to Madagascar Plateau Exploration data available for consultation and/or sale

MADAGASCAR THANK YOU