Exxon Sees Offshore Madagascar Drilling In 2007

Posted 21 June 2006 @ 04:45 pm EET     Print     Reprint     E-Mail     Comments

ANTANANARIVO (Reuters) - U.S. oil giant ExxonMobil sees exploratory drilling operations off the northwest coast of Madagascar getting under way in 2007, a company official said on Tuesday.

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Exxon has interests in four blocks along the Indian Ocean island's northwest coast.

"The central block, the Majunga block, is the one we hope to drill our first exploratory well on," Exxon public affairs manager John Harrington told Reuters.

"We are unlikely to begin drilling this year but we hope to contract a rig by 2007 and start then," he said.

The block is in 2,000 to 3,000 metres of water and there are only a few rigs that can operate at such depths.

Exxon has a 50 percent stake in the Majunga block while 30 percent is owned by UK gas firm BG Group Plc and 20 percent by South Korea's top oil refiner SK Corp.

Harrington said the venture was far from guaranteed.

"It's a high risk prospect but with high rewards," he said, adding "it has a less than even chance of succeeding."

There is huge interest in alternative oil sources to the unstable Middle East and sky-high prices are providing the industry with an influx of cash for fresh investments and exploration.

East Africa's coast remains relatively unexplored though West Africa is one of the world's fastest growing oil producing regions.