The exploration period of the PSC has been extended while progress is made towards development and securing title for a 25-year exploitation period.
It has until early November to submit a development plan for Tsimiroro, which was declared commercially viable in May and was subsequently given clearance for six months of test sales.
Stewart Ahmed, MOIL’s chief operating officer said: “We are very pleased to have obtained approval for the amendment to the PSC which we believe clarifies the steps required to pass from the current exploration period into the 25-year exploitation period.
"Madagascar Oil is very grateful to the Government of Madagascar and OMNIS [L'Office des Mines Nationales et des Industries Strategiques] for their ongoing support.
“We continue to work on the Tsimiroro development plan which we are on track to submit to OMNIS ahead of the 4 November 2014 deadline.
“We are having ongoing constructive discussions with OMNIS on the structure and approach to our development plan and welcome the opportunity to obtain early feedback on our proposals on the way forward on this exciting project."
Today’s agreement with the Madagascan authorities represents an endorsement of MOIL’s standing in the country, according to City broker VSA Capital.
“This [the extension] shows the strong relationship that exists between MOIL, OMNIS and the Madagascar Government, which is clearly positive news for the future development of MOIL’s assets,” VSA analyst Marc Anis-Hanna said in a note.