Africa Development Energy FDI Gas Mining Oil Zimbabwe

Invictus flags more oil, gas in Zimbabwe

Zimbabwe may be sitting on more oil and gas deposits than initially projected. The country has five other basins capable of hosting hydrocarbons such as oil and gas, in addition to the Zambezi Valley basin, which is being prospected by Australia Stock Exchange-listed Invictus Energy.

The discovery of commercially viable oil and gas deposits in the Muzarabani area by Invictus could raise the potential of more oil and gas in the other basins, experts say.

Invictus plans to sink two test wells by September next year after further geophysics and exploratory work set to begin next month.

Mr Paul Chimbodza of Geo Associates, Invictus’ partner in the Muzarabani project, told The Sunday Mail that the five basins warrant further exploratory work to ascertain the availability of oil and gas.

“Zimbabwe has six sedimentary basins that have the right geological address that warrant exploration for hydrocarbons, being Zambezi Basin, Kariba Basin, Tuli Basin, Mozambique Basin, Okavango basin and Nama Kalahari basin,” he said.

“Some of these have known oil seeps that warrant further detailed exploration. Geo Associates is focused on just a small part of the Zambezi Basin, and there is room for other oil and gas explorers in the rest of these aforesaid basins.”

Speaking at a technical briefing for journalists in Harare last week, Mr Chimbodza said:

“The traditional ceremony will mark commencement of work on the ground. By October we will have boots on the ground to do the work relating to selection of the sites where the test well will be sunk. We will have two test wells in 2021.”

Invictus has begun mobilising a drilling rig, which is estimated to cost over US$20M.

The energy firm is considering the option of hiring rigs that are already in the region

Currently, there is one rig in Namibia and two in Mozambique.

Drilling is expected to take up to 30 days.

Also read: Zimbabwe steps up efforts to revitalize mining industry

The company has sunk US$3,5M on geotechnical studies, seismic reprocessing, seismic interpretation and the recent acquisition of an investors licence from the Zimbabwe Development Agency.

Speaking at the same event, Mines and Mining Development Minister Winston Chitando said siting of the drilling sites was a meticulous and expensive exercise.

“The drilling for an oil test well is expensive. We are looking at around US$20M just to check the existence of the oil and confirm beyond doubt. We are talking of an area which is around 100 000 hectares,” said Minister Chitando.

“So, what is critical is to ensure that the siting of that well is on point. There is very little room for error, hence the massive work taking place before the drilling. The siting of the well is what I would call a do or die.

“That is the reason why it is taking so much time. We are talking of two test sites, one which is four kilometres deep and the other two kilometres. The siting of those positions is extremely important, but the actual drilling doesn’t take time; I believe one month is enough to drill the well.”

Production sharing
Government and Invictus are negotiating a production sharing agreement (PSA) that will provide long-term tenure to the investor.

Minister Chitando said the PSA will be concluded in the next few weeks.

“There is now need to have a long-term tenure and I am sure at some stage you will remember some time back an announcement was made that there is a Government team that was set up — led by the Permanent Secretary in the Ministry of Finance and Economic Development (Mr George Guvamatanga) — to negotiate production sharing agreements with Geo Associates and Invictus.

“Again you find that minerals like gold and platinum, work on royalties, but oil and hydrocarbons work on production sharing, which means that Government gets a certain percent of the production.

“So we have been seized over the last few months negotiating a production sharing agreement with the investors and I am pleased to say the draft, is almost in place. It will go through the normal Government protocol.

“We expect that PSA will be concluded in the next few weeks.”

Written by Lincoln Towindo

Source: Sunday Mail Zimbabwe

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