You Only Get One Alan Bond In Your Lifetime  

I saw a link to this story on PeakOil.com about an "anonymous" source within Madagascar Oil talking up the prospects of Chinese involvement in their projects. Time passes but some things never change - maybe we'll get to see Airship Industries launched again if they bite.

And maybe Bondy will get to use Kerry Packer's famous line on the Chinese one day...

[Please note that this is of course just idle apophenia and the exact links between Bondy and Madagascar Oil are rather murky - so I may just be being overly cynical about the amazing opportunity presented by this vast oil resource to the lucky Chinese. I always think Caveat Emptor is a useful phrase to keep in mind though.]

Chinese oil majors are looking at forming upstream joint ventures in Madagascar to exploit newly discovered reserves on the island situated off Africa's east coast, says a senior official at Madagascar Oil S.A.

More than one Chinese oil firm has approached Madagascar Oil about the possibility of cooperating in oil exploration and taking a stake in the company, which was founded in 2004 and is eyeing a listing in London in the second quarter next year, said the official who asked not to be named.

"They (the Chinese companies) have very deep pockets. I prefer to work with them on the heavy oil projects because those are very capital intensive," the person said, bt declined to name the Chinese companies that are in talks with the African oil company.

ExxonMobil Corp. (XOM), Sterling Energy PLC (SEY.LN) and Aminex PLC (AEX.DB) have already formed joint ventures with local partners since 2001 to develop oilfields on the island and offshore. Madagascar is expected to produce its first barrel of crude in 2007.

As China imports about 40% of its oil needs, high international oil prices have pushed the country's cash-rich oil giants to more keenly search for upstream assets overseas to control their costs, analysts said.

Madagascar Oil, with offices in London and the Madagascar capital of Antananarivo, is involved in three major projects. Two are heavy oil developments at the oilfields of Tsimiroro and Bemolanga, while the third is the exploration and appraisal of light oil and natural gas on the world's fourth largest island.

The firm's assets have a total valuation of between US$400 million and US$500 million, the person said.

Heavy oil has more impurities than light oil and thus costs more to refine.

"The Chinese will likely be involved in the Tsimiroro project, because of the big volume," the person said.

The Tsimiroro Oilfield is estimated to have a reserve of several billion barrels of crude, but it is of low quality, with an American Petroleum Institute specific gravity of 14 to 16 degrees.