Complex sentence: The reef is located in the area of the French Scattered islands in the Indian Ocean, but has been annexed by Madagascar in 1976, presumably because of the possibility of oil fields in the vicinity.
Split into simpler sentences: The reef is located in the area of the French Scattered islands in the Indian Ocean. However, it was not claimed by any nation until 1976, when it was annexed by Madagascar in 1976, presumably because of the possibility of oil fields in the vicinity.