A Look At Our Neighbour: Madagascar Oil looks far ahead…

A project to develop heavy oil at Tsimiroro could lead to the production of tens of thousands of barrels per day, but that isn’t going to happen overnight. Madagascar Oil’s operations chief Stewart Ahmed has every reason to be pleased. A decree approved by the government on May 21 that authorized the company to market Tsimiroro’s test heavy oil for six months will enable the firm to make a pitch for its projects in Madagascar to would-be investors.

After contracting a company to supply fuel oil in coming weeks (AEI 723), Madagascar Oil will be able to sell the combined “heavy crude-fuel oil” mix to the state owned power utility Jirama starting from the second half of this year. The company has already stored over 90,000 barrels for exactly that operation.

If successful, the life-size test will enable Madagascar Oil to measure the feasibility and profitability of Tsimiroro. In a second stage, any surplus output could be treated in South African refineries that possess technology stemming from the Fisher-Tropsch process that transforms coal into gasoline, a similar process needed to refine heavy oil.

Thanks to that technology South Africa’s Sasol produces nearly 100,000 BOE in its plants from coal.

Further down the road, Madagascar Oil could think of building a refinery on the island and export gasoline in the region.
But that prospect seems far away. Privately, Madagascar has said it could one day be producing 300,000 bpd by using a maximum of wells on Tsimiroro.(Africa Energy Intelligence)