Madagascar has terminated 21 hydrocarbon exploration and production permits along with 21 production-sharing contracts (PSCs), the government announced following a Council of Ministers meeting at Iavoloha Palace on February 5.
The decision affects a mix of expired titles and active contracts with international and domestic companies. Four permits held by the state-run Office of National Mines and Strategic Industries (OMNIS) were formally withdrawn, while 17 other permits, which had reached the end of their validity periods, were declared void. The statement did not specify the reasons behind the terminations.
Among the contracts canceled was a PSC signed on August 27, 2015, with U.S.-based CB World Trade Natural Energy Ltd., covering exploration and potential production in the Belo Profond Nord area, including blocks 1841_5, 1841_6, 1941_1, 1941_2, 1941_3, and 1941_4.
Local media have framed the move as part of a broader “cleanup” of Madagascar’s oil sector. According to reports, the government intends to streamline upstream operations, strengthen the legal framework, and prepare for a new promotion campaign aimed at attracting investors. Olivier Herindrainy Rakotomalala, former Minister of Mines and Strategic Resources, reportedly proposed restructuring the sector in late January 2025 amid limited development of the country’s identified hydrocarbon potential.
The plan reportedly included canceling contracts with companies that had withdrawn from Madagascar, though authorities have not detailed timelines for reassigning the affected blocks. The Ministry of Mines and Strategic Resources indicated that these areas would now revert to the state through OMNIS, opening opportunities to seek new partners for exploration and development.
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During a January 29, 2026, conference on extractive sector governance co-organized by EITI Madagascar and the Institute of Political Studies of Madagascar, Minister Carl Andriamparany emphasized that the cancellations were necessary to facilitate a fresh oil promotion strategy. “As we consider launching a new oil promotion campaign, it is legitimate to clean up all these areas,” he said, referring to expired and inactive contracts.
The terminations leave Madagascar Oil SA as the only operator with an active PSC in the country. The company holds the Tsimiroro exploration block 3104, which contains an estimated 1.7 billion barrels of heavy oil. Madagascar Oil has already signed agreements to supply heavy fuel oil to domestic firms in the agribusiness and textile sectors, highlighting the potential for local industrial use of hydrocarbon resources.
Industry analysts said the move reflects Madagascar’s intent to attract new investors by creating a more transparent and streamlined upstream framework. “Reclaiming inactive and expired exploration blocks allows the government to design improved PSCs, offer clearer terms, and promote investment in areas with untapped hydrocarbon potential,” said a regional energy consultant.
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The government has not specified which international or local companies were affected beyond CB World Trade Natural Energy Ltd., but sources suggest the majority of terminated PSCs involved firms that had scaled back operations or failed to meet exploration obligations.
Observers noted that while Madagascar’s oil sector has long been underdeveloped, the reallocation of these blocks could revive interest among international energy companies. The country’s heavy oil reserves, particularly in the Tsimiroro block, offer potential for domestic supply agreements and export-oriented development.
As Madagascar seeks to modernize its hydrocarbon framework, authorities are also considering a new model production-sharing contract designed to provide greater clarity on fiscal terms, operational obligations, and environmental compliance. Analysts said a transparent regulatory environment will be critical to attracting credible partners while ensuring sustainable development of the country’s oil resources.
With the recent cleanup, Madagascar positions itself to restart exploration in previously underutilized areas while consolidating oversight of existing operations. The government’s approach signals a strategic pivot towards structured investment, regulatory clarity, and targeted industrial partnerships in the country’s nascent oil sector.
