23rd May 2014 11:20
LONDON (Alliance News) - Madagascar Oil Ltd Friday said it has been granted an approval by the Madagascar Council of Ministers to complete test sales of its Tsimiroro crude oil, which will be the first market test of crude oil produced in Madagascar.
The oil and gas exploration and development company said the decree was approved on Wednesday and it is intended that test sales of between 55,000 and 73,000 barrels of Tsimiroro crude oil will start in the second half of 2014 and will last for a period of up to six months under the terms of its current exploration licence.
The company said the test is designed to show that Tsimiroro crude can be used as a blended heavy fuel oil substitute in the local market, mainly for power generation purposes.
It said it will use stored oil volumes for the test sales, adding the tests will also provide valuable input to development planning activities, which include possible sales to the local Madagascar market.
The news comes after the company learned earlier this month that the Tsimiroro oil field in Block 3104 was a "commercial discovery" under the terms of its production sharing contract with its government partner.
Oil production rates have averaged 468 barrels of oil per day in April, and 361 barrels of oil per day in March.
Madagascar also said earlier this month it was working on a financial strategy to secure funds to support the next phase of its activities, including the development of Tsimiroro, and is working on a development plan for the site, which it expects to issue in the coming months.
"It is clear that Tsimiroro is a project of national importance, and we are honoured to be working to a common purpose with the government and people of Madagascar," Chief Operating Officer Stewart Ahmed said in a statement.
Madagascar Oil shares were up 3.6% to 18.00 pence Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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