Invictus eyes regional expansion

The firm recently revealed that preliminary compositional analysis confirmed high quality natural gas containing minimal impurities, which will require minimal processing before sale to downstream customers.
OIL and gas exploration firm Invictus Energy, which recently made a gas discovery in Zimbabwe, has expressed ambitions to expand regionally, NewsDay Business can report.

The firm recently revealed that preliminary compositional analysis confirmed high quality natural gas containing minimal impurities, which will require minimal processing before sale to downstream customers.

The energy company declared two material discoveries after recovering 15 downhole gas and gas-condensate samples from both the Upper and Lower Angwa Formation targets in the Mukuyu-2/ST-1 well during its December drilling campaign.

The dual discoveries confirmed the incredible potential of the Mukuyu gas field and defined a new petroleum province in the Cabora Bassa basin, where the company holds a dominant acreage position of 360 000 hectares in proximity to a high-demand energy market with established delivery infrastructure.

“We do have ambitions to expand regionally dependent upon the ultimate reserves from our licence area as there is a significant power and gas shortfall in South Africa and untapped potential in countries such as Zambia,” Invictus managing director Scott Macmillan told the African Energy Chamber in a statement released Friday.

African Energy Chamber is an energy advocacy group based in South Africa.

“We can export electricity through the Southern Africa Power Pool (Sapp) and with our project located within 100km of three major Sapp interconnectors it provides us with the ability to export across the region using the existing infrastructure.”

He continued: “There is also an opportunity to export gas to South Africa by joining into the ROMPCO pipeline from Mozambique which has a captive market in South Africa and fetches premium pricing.

“South Africa is facing a one billion cubic foot per day shortfall in gas supply by 2030 which is obviously a huge opportunity for a resource like ours that is strategically placed to fill the void.”

With regards to a development plan, Macmillan envisaged Mukuyu to be a phased development consisting of an initial pilot project to provide early revenue and demonstrate proof of concept.

He noted that this would be followed by a more traditional full field development plan to commercialise a large volume of gas through gas-to-power, gas-to-fertiliser and feedstock for industrial customers as well as small scale liquefied natural gas and compressed natural gas for end users not near the pipeline network.

“We see gas playing a critical role in the industrialisation of the country and gas-to-power is probably the biggest opportunity in Zimbabwe for us to monetise large volumes of gas given the energy deficit in the country,” he said.

“This energy deficit is going to be exacerbated in future due to increasing energy demand from some of the intensive energy users such as the mining houses and large industrial consumers and their need for reliable and affordable power is greater than ever and crucial for their businesses.

“Five hundred megawatts (MW) is just the start and it is estimated that an additional 2 500MW of new power generation is required to meet demand in the next few years.

“Due to our proximity to the electricity network, through a gas-to-power development we can utilise the grid as a virtual pipeline to deliver electrons to end users which significantly reduces development cost and timeline of the initial phases of full field development.”

The Invictus chief said raising capital for oil and gas projects has been challenging, particularly in the exploration space, which comes with high risk and no guarantee of achieving success and making a discovery.

“We have been very fortunate to have had excellent support from our shareholders who have funded our exploration activity to date,” he noted.

“Post the gas-condensate discovery at Mukuyu-2, we have now de-risked the asset and — with a tangible resource base — it opens additional options for the company to fund the future work programme.

“We have a high amount of equity in our licence (80%) and it provides us with flexibility on a number of fronts. These options include farming out an interest to other E&P companies, financing from regional development banks, strategic local investors that are positioning to become a part of a new industry in Zimbabwe and pre-payment for future offtake.”

He disclosed that the flow test design work at the Mukuyu-2 well is being undertaken to determine the long leads and mobilisation plan for the test given the relatively remote location.

The company is also planning a 3D seismic survey at the Mukuyu field, which will assist in determining future appraisal and development well locations for an early phase development.-newsday