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By: BankTrack
Created before Nov 2016
Last update: 2016-10-07 05:08:48

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Sector Oil and Gas Extraction
Location

About Madagascar tar sands

Located in the western Melaky region of Mahajanga pronvince are the two most developed tar sands projects of Madagascar, named Bemolanga and Tsimiroro. The size of both fields is approximately 70km2 in area.

Bemolanga is estimated to contain over 16.5 billion barrels of oil-in-place and almost 10 billion barrels recoverable. Madagascar Oil (the largest onshore oil operator in the country) estimates that at full production Bemolanga could produce as much as 180,000 barrels per day over 30 years. The depth of the field is about 15 meter below the surfaces making it ideal for open case mining.

The information available on the Tsimiroro field is varying. Madagascar Oil's highest estimate is 4.5 billion barrels of oil in place with a production capacity of 100,000 barrels per day over 20+ years. At the same time, an independent estimate made in 2009 was of only 3.5 billion barrels and 900 million recoverable. The depth of the field is between 40 and 300 metres below the surface.

The Tsimiroro field is 100% owned by Madagascar Oil, while the Bemolanga field is owned 60% by Total and 40% by Madagascar Oil.

Latest developments

Latest update

2011-05-26 00:00:00

What must happen

Private banks must not participate to the funding of these projects, whatever forms it takes, be it project finance, general corporate loans or underwriting of shares or bonds on the stock markets of the companies involved.

Impacts

Social and human rights impacts

The main social concerns related to this project include:

  • Displacement
  • Resettlement
  • Conflict
  • Threats to culture
  • Increased insecurity
  • Political instability
  • Inability to defend themselves
  • Increased poverty
  • And more

-readmore-

More detailed explanation:

Western Madagascar is very sparsely populated, with a density of 0 to 4 people per km2. The commune of Ankisatra, the location of the Tsimiroro field, has a population of less than 3,000. While the low population means less people are at risk of displacement because of the tar sands projects, it also means that the few people who do live in the area have less ability to defend themselves against that potential displacement. Further risk multipliers include the high levels of poverty in Madagascar (the World Food Programme claims 60% of the country is ‘extremely poor'), and the low levels of education.

In addition, the political situation in Madagascar is unstable. The current government is considered illegitimate by the United States and the European Union, and is suspended from the African Union, having come to power via a military coup d'etat in March 2009. Talks to form an inclusive transitional government fell apart in December 2009, and it is unclear whether any environmental and social issues relating to the tar sands development will be dealt with in a transparent manner.

The Production Sharing Contract (PSC) signed for both projects by Madagascar Oil with the government of Madagascar is perhaps even more heavily biased in favour of the oil companies than the similarly exploitative Kashagan oil field PSC in Kazakhstan.

90% of the recovered oil is considered Cost Oil (that is, it goes to the oil companies to cover the costs of their investment), with the remaining 10% of oil produced divided 90/10 between the company and the government for the first ten years of the contract, 80/20 for the following ten, 70/30 for the next decade, and 60/40 for the remaining life of the field, meaning that after thirty years of commercial exploitation the government of Madagascar will receive only 4% of the oil. Madagascar Oil’s view that the contracts “were negotiated at a very favourable time and contain attractive terms and conditions” is something of an understatement. Full Friends of Earth Report here.

For more information please read the Friends of the Earth Europe report.

Environmental and climate impacts

There are also many environmental concerns. Such as:

  • Habitat destruction
  • Threatening of species
  • Environmental destruction
  • Biodiversity loss
  • Climate change
  • And more

-readmore-

More detailed explanation:

On the western edge of the Tsimiroro field is the 1,520km2 Tsingy de Bemeraha nature reserve, a UNESCO World Heritage site since 1990. The area was awarded UNESCO status because of its limestone karst landscapes, undisturbed forests, mangrove swamps and rare animal species (it is the only place in the world where the armoured leaf chameleon can be found). Around half of the reserve is designated as a "strict" or "integral" reserve, meaning no development or tourism is allowed. Despite this, UNEP claims that "there is no management plan or zoning [...] boundaries are not marked [...] [n]o effort is made to patrol the Reserve or prevent legal infractions".

East of Bemolanga lies the smaller reserve of Ambohijanahary. There is little public information about this area, and what little there is highlights that its only real protection is its inaccessibility. Madagascar is a highly biodiverse country, with up to two-thirds of its species being endemic to the country.

For more information please read the Friends of the Earth Europe report.

Governance

Updates

Latest update

2011-05-26 00:00:00

On May 20, 2011, Total SA of France sought a year's extension of the 3102 Bemolanga license in Madagascar. A decision should be made by mid-June by the Office for National Mining and Strategic Industries. Total stated it would explore for conventional oil if the license were extended. Read more.

In a Reuters news article, information was released that Madagascar's government has suspended tenders for 225 offshore oil blocks until further notice. The country's mines and hydrocarbons minister, Minister Mamy Ratovomalala, told reporters that there were plans to launch tenders for the blocks in the Morondava basin, along the Indian Ocean Island's western coast. Even though there is a strong interest from foreign investors exploration has been halted due to political crisis until further notice.

A 2008 steam injection pilot project at Tsimiroro produced 150-200 barrels a day, and Madagascar Oil drilled 50 wells in the area in 2007 and 2008. From 2010, the joint venture will be running another pilot project, this time for three years, before deciding whether to proceed with commercially developing the field.

Financiers

Related companies

Madagascar Oil United States

TotalEnergies France show profile

Oil and Gas Extraction | Gas Electric Power Generation | Pipeline Transportation of Crude Oil | Pipeline Transportation of Natural Gas

News

| |
Type:
Year:
blog
external news
our news

Madagascar prolonge d'un an une licence d'exploration de Total

2011-07-28 | Madagascar | Reuters
blog
external news
our news

Barclays, HSBC and RBS linked to 'dirty financing' for fossil fuels

2011-06-14 | The Ecologist
blog
external news
our news

Madagascar fears repeat of Canada's tar sands devastation

2011-06-01 | The Ecologist
blog
external news
our news

Madagascar: Total seeks extension at Bemolanga

2011-05-25 | Oil & Gas Journal (OJG)
blog
external news
our news

The threat to Madagascar from tar sands; a first hand account

2011-05-23 | World Development Movement
blog
external news
our news

First Nation Tour brings truth to France on Tar Sands Development

First Nation’s delegation spoke to EU parliamentary members, French government and French investors to address tar sands impacts on First Nation communities directly counteracting the Canadian Foreign Department’s platform on Tar Sands Development.
2011-05-20 | France | Indigenous Environmental Network - Les Amis de la Terre
blog
external news
our news

First Nations protest tar sands investment at Royal Bank of Scotland AGM

• New research shows that, since public bail-out in 2008, RBS has raised more than £5.6 billion for companies involved in controversial Canadian tar sands projects, £2.2 billion of which was in the last twelve months • Canadian First Nations representatives to voice opposition in person at RBS AGM
2011-04-19 | London | Platform
blog
external news
our news

Can Madagascar’s tar sands project be stopped?

2011-03-31 | Madagascar | Make wealth history
blog
external news
our news

Madagascar Oil declares force majeure on oil blocks

2011-03-21 | Reuters
blog
external news
our news

Malagasy oil woes

2011-03-06 | Madagascar | Petroleum Economist
blog
external news
our news

Madagascar freezes offshore oil blocks tenders

2011-03-04 | Madagascar | Reuters
blog
external news
our news

Madagascar Oil brings tar sands project to London market

2011-02-07 | Madagascar | The Guardian
blog
external news
our news

Devastation, Madagascar

2010-12-27 | The Media Co-op
blog
external news
our news

Madagascar Oil Sells $80 Million in Shares to Tap African Field

2010-11-08 | Bloomberg

Documents

Type:
Year:
csr policies
2013-07-26 00:00:00

Oil Sands - Sector Policy

2013-07-26 00:00:00 | BNP Paribas
ngo documents
2011-05-30 00:00:00

Marginal Oil : What is driving oil companies dirtier and deeper?

2011-05-30 00:00:00 | Friends of the Earth Europe, Heinrich Böll Stiftung
ngo documents
2010-05-01 00:00:00

Tar sands: Fuelling the climate crisis, undermining EU energy security and damaging development objectives

2010-05-01 00:00:00 | Friends of Earth Europe

Links

Oil sands truth: shut down the tar sands

Oil Sands Truth exists to disseminate information regarding the environmental, social and economic impacts of tar sands development projects being proposed and currently in progress.
http://oilsandstruth.org/

New film: Tar sands – to the ends of the earth

The documentary shows how Madagascar's rural population and its fragile eco-system will be devastated if oil companies start exploiting tar sands in the country. The film documents campaigners from Friends of the Earth Europe, USA and Madagascar travelling to Canada to witness the devastating impact that tar sands are having in the only country where they are currently commercially exploited.

http://www.foeeurope.org/tar-sands-ends-of-earth-film-170613

Brief history

Total paid $100 million for its 60% share in the Bemolanga field in September 2008, becoming its sole operator and "agree[ing] to a 2 year work program to drill 130 additional core wells at a cost of $200 million." It is estimated that the development of the field will cost somewhere between $5- 10 billion. On its website, Total claims that "[a]ppraisal work is being conducted to confirm that the license has sufficient resources to underpin a mining operation, starting in 2020, to produce a potential 200,000 barrels per day".

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