Madagascar Postpones Oil Auction

3 December 2009 (Last Updated December 3rd, 2009 18:30)

Madagascar has delayed the auction of 50 offshore Indian Ocean oil blocks until the second half of 2010, according to officials. The move follows months of political turmoil, which has worried foreign investors, writes Reuters. The acting director general of the Office of Nat

Madagascar has delayed the auction of 50 offshore Indian Ocean oil blocks until the second half of 2010, according to officials.

The move follows months of political turmoil, which has worried foreign investors, writes Reuters.

The acting director general of the Office of National Mines and Strategic Industries, Joeli Lalaharisaina, told Reuters that he expected exploration activity to pick up next year after 2009's slowdown.

Lalaharisaina said the sale of exploration rights, which will see the number of 2,000km² offshore blocks available increase to more than 50 from six, was now sceduled for next August or September.

A military-backed coup in March on Madagascar and the threats that followed to revise existing contracts have shown there are risks attached to exploring oil in the region.

Lalaharisaina said ExxonMobil still intends to send foreign staff back to Madagascar.

"It's a major worry right now that investors might pull out," he told Reuters. "Right now we are trying to reason with them, to make them understand the crisis is temporary."