ANTANANARIVO, Madagascar (Reuters) - ExxonMobil, the world's largest oil company, expects that oil prices will fall as the current bullish cycle slows, the company's head of exploration operations said Friday.

"We primarily don't believe the price will stay this high. The oil business is cyclic ... Our expectations are that prices will drop," Tim Cejka, president of ExxonMobil Exploration Company, told Reuters at the company's new offices.

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U.S. light crude for March delivery was up 94 cents $67.20 a barrel in electronic trading Friday.

Exxon (Research) is ramping up operations in Madagascar, the world's fourth-largest island, where it believes its leases could hold as much as 7 billion to 10 billion barrels of oil.

The company plans to begin drilling its first exploratory well later this year or in early 2007, which would be the first-ever deepwater well to be drilled off Madagascar.

It has stakes in 87,000 kilometers off the northwestern coast of the island, which is located off the east coast of Africa.

Cejka has warned in the past that the search for oil in Madagascar could turn up empty, but has said that production could start in four or five years if Exxon finds good fields.

A promising seismic study in 2004 by independent U.S. exploration company Vanco Energy sparked interest in its potential.

Besides Exxon, Norway's Norsk Hydro (Research) has invested in offshore blocks.

Madagascan government officials in September said they are negotiating possible concessions with Chevron Texaco (Research), Royal Dutch Shell (Research), BP (Research), Total (Research), Norway's Statoil (Research) and China's National Petroleum Corporation.

Besides offshore prospects, some believe that onshore deposits locked in bituminous shale can be economically recoverable if oil prices stay above $30 a barrel.

With larger fields in traditional areas yielding less or becoming tougher to access, oil majors like Exxon have started looking in more remote corners like Madagascar where the risk is high but the potential is equally so.

Madagascar is home to 17 million people. It has some of the world's most unique flora and fauna, and is one of the last unexplored frontiers in the hunt for African oil.

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