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ZIM SMELLS OIL, GAS ... as hopes of joining top SADC producers rise

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• ZIM SMELLS OIL, GAS ... as hopes of joining top SADC producers rise

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• By Southern Times --
• Nov12,2018 --
• 0 Comments

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By Southern Times Reporter
Zimbabweans were upbeat this week after Australian firm, Invictus Energy, raised prospects of the discovery of oil and natural gas in Muzarabani, in the north-eastern corner of the country close to the borders of Mozambique and Zambia.
If the discovery is confirmed and followed through to full exploitation, Zimbabwe could join other countries in the SADC region such as Angola and Mozambique as a leading natural gas producer.
Invictus said the Muzarabani project has high potential to produce 3, 9 trillion cubic feet (tcf) of natural gas and 181 million barrels of conventional gas.
In its maiden resource estimate, the company said the Muzarabani project had a net mean recoverable conventional potential of 680 million barrels of oil equivalent (boe), consisting of 3,9 tcf and 181 million barrels of condensate or conventional gas.
In 2010, American firm, Anadarko, discovered huge natural gas reserves in Mozambique’s Rovuma Basin in the northern part of the country. The discovery has led to massive investments in this region.
Due to the discovery of over 180 tcf of natural gas reserves by the Texas-based Anadarko and Italian firm, ENI, Mozambique is expected to become a major exporter of gas by 2023. Anadarko will build an LNG plant to process the gas they discovered in the area, off the northern coast of Mozambique near the border with Tanzania.
It selected a joint venture of developers that includes Mc Dermott (USA), Saipem (Italy) and Chiyoda (Japan) to construct the Afungi LNG Park valued at US$25-30 billion.
Anadarko expects to conclude several sales and purchase agreements (SPA) by year-end for liquefied natural gas (LNG) and to announce its final investment decision in 2019.
Analysts said while it was too early to speculate on the Zimbabwean project, chances were that the discovery of oil and gas would lead to massive development in the Muzarabani area.
Invictus Energy said that “exploration activity being undertaken had positive indications that an exploration well would be drilled to confirm the potential of the Muzarabani oil and gas prospect".
The 3,9 tcf of natural gas can give the country 500 megawatts of power for 40 years, while 181 million barrels of conventional gas can give Zimbabwe enough fuel for the next 20 years at current consumption levels of 25 000 barrels per day, according to Invictus managing director Scott Macmillan.
The fuel that can be produced from conventional gas includes high-octane petrol, as well as jet, diesel and boiler fuels.
Invictus cautioned that the quantities of petroleum that may potentially be recovered by the application of a future development project relate to undiscovered accumulations.
But experts said while the discovery could be a game-changer for Zimbabwe, it could cost billions to realise.
“There will be significant investment needed and it’s too early to count the benefits and potential impact, except to say if properly managed this will help lower the import bill and ensure that the forex we use on fuel imports is deployed elsewhere,” said a Zimbabwean consultant engineer working with Invictus on exploration in Muzarabani.
“The investment into this venture will have to be safeguarded to ensure people still commit to new upstream and value chain projects.”
Economists said it was important to prioritise the oil and gas discovery and to speed up exploration.
They also highlighted that Zimbabwe needed to review its petroleum industry policies.
“A discovery alone is not enough. There is still more work to be done and the project still has to undergo bankable feasibility,” said Jeffrey Kasirori.
“If proven to be commercially valuable, this will be a further advantage from our natural endowment and the economy can benefit from job creation and value addition, let alone servicing local demand.”
President Emmerson Mnangagwa told journalists in Harare that Invictus findings while exploring for oil and gas in Muzarabani, were “positive and point to oil and gas deposits” in the area.
He further stated that Invictus had “committed to entering a production sharing agreement with the government of Zimbabwe which will be applicable when the project proceeds” to the commercial production stage.
Invictus committed to drill an exploration well by 2020.
Prospects of gas and oil production in Zimbabwe come after the SADC Secretariat in June this year began a journey to extract natural gas across the region.
Southern Africa is believed to be sitting on natural gas reserves of about 600 trillion cubic feet and this could reduce heavy reliance on biomass energy once fully exploited.
The reserves remain largely untapped due to lack of capital, feasibility studies and plans to extract the gas. Only South Africa and Mozambique have so far begun exploiting some of the natural gas reserves in those countries.
Speaking at the 37th SADC Summit in Pretoria last year, the then South African President Jacob Zuma said the discovery and exploitation of natural gas in the region should constitute the backbone of SADC’s regional economic integration.
He urged the region to develop the natural gas reserves as soon as possible to accelerate the region’s development. – additional reporting www.ft.com/www.independentonline.co.za.​

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