[IMG] Minister Chitando THE INTERVIEW Tendai Mugabe 0TM: Can you...

Minister Chitando

THE INTERVIEW Tendai Mugabe
0TM: Can you give us a brief background relating to the Muzarabani oil and gas project?
WC: In the 1990s, Mobil Oil conducted an exploration in what we call the Greater Muzarabani Area. We call it the Greater Muzarabani Area in the sense that the exploration that they conducted covers not only the area in question where Invictus is doing work, but areas beyond that.
They then conducted extensive geo-physical work which includes aerial magnetic surveys. The data from that exploration work, they left a copy of that data in the custody of Government in line with the agreement they had signed with Mobil.
So they left the data which is stored in magnetic tapes which are under the custody of the Ministry of Mines.
TM: It’s now more than 20 years after Mobil Oil conducted that exploration. What has happened now that has triggered Government’s interest to revive that project?
WC: In line with our mantra that Zimbabwe is open for business, what then happened is that Government facilitated Invictus through their local partners called Geo Associates, to come and access the data which Mobil generated when they did their exploration.
TM: And what has Invictus done with that data?
WC: That data was sent to two sets of consultancy, one of them a company based in the United States of America called Netherland, Sewell and Associates Inc, in addition to Invictus doing work directly themselves.
They actually have a team in Harare at the moment doing that work. The geo-physical work has been done, the aerial magnetic survey of the area was done already. All the work now involves the re-interpretation of the data that Mobil generated.
So, Invictus re-interpreted the data and from that re-interpretation they then established a resource of 680 million barrels of oil. The other 180 million is made up of two forms of existence.
TM: What are those two forms of existence?
WC: Here we are talking of a resource which has got oil and which has got gas. The oil is straight forward.
With oil you just take the oil and put it through a refinery and, depending on the characteristics, you can convert it either to petrol or diesel.
But with gas, basics in theory there are three main uses of gas. It can be used for big users or off takers of that gas, secondly it can be used for power generation because it becomes quite cheaper and thirdly that gas can be converted into oil and processed in the normal manner.
TM: In simple terms, may you explain how Invictus managed to establish that there are oil resources in Muzarabani?
WC: There have been recent discoveries of oil and gas in geological formations similar to the ones we have in Muzarabani and these have taken place in Uganda and Kenya. As a result of that, there has been more knowledge gained technically from those discoveries.
Secondly, what happens is that re-interpretation is done using (advanced technology) software; it’s not manual and there has been more modern interrogation too which has been developed post-Mobil exploration, hence the ability of Invictus to determine the resource now.
The area we are talking about is about 200 square kilometres. That is the size. In that 200 square kilometres what happens is they want to de-risk by drilling a well. It is very expensive to drill that well and it costs about US$20 million and we are talking of 300 millimetre diameters up to about four and half kilometres deep. It means that in that whole 200 square kilometres, what you want is to de-risk and confirm — drill at the best site so that you make sure you have done extensive geo-physical work on that whole 200 square kilometres. But in the process of doing that geo-physical work there is a chance of further increasing the size of the indicative resource. There is some further work to be done. The whole idea is by mid next year to have zeroed in and say we will drill the well in this particular place and the well is drilled and once it is confirmed then we are in business.
TM: So, can we safely say Zimbabwe has discovered oil?
WC: We are past that. It’s a question now of further confirmation. In oil technical terms, there is what is called establishment of a prospective resource and there is what is called a discovery. In oil technical terms, the way things are done, you establish a prospective resource and there is a definition of what is a prospective resource. It’s quite a success to establish a prospective resource. But you only declare a discovery when you have drilled a well to confirm the prospective resource. There is a discovery in layman’s terms and there is a discovery in technical terms. From the analysis and re-interpretation, a prospective resource is now known and the quantity. But to call it a discovery, it entails the sinking of a well.
TM: When should we expect the drilling of that well?
WC: The projection is that by mid 2020 we should have drilled the well, then we will take it from there.
TM: Can you tell us who Invictus is because there have been unverified reports that it is just a briefcase company?
WC: Invictus is a special purpose vehicle established for the purpose of raising money to exploit this resource.
Modern working style in the West is that people don’t work in offices, but from home. And in this case its re-interpretation of work that has already been done. What you need is experts who assist using modern technology and those experts are here in Harare.
TM: What role is Government playing in this whole project?
WC: Government comes in as a facilitator and regulator, but also most countries that produce oil sign production sharing agreements with companies. So, that is how Government comes in. Invictus has also committed to do a production sharing agreement with the Government of Zimbabwe.
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