Oil, gas firm eyes SA’s gas market

Invictus Energy, the Australia listed Zimbabwe firm exploring for oil and gas in Muzarabani, is targeting South Africa as a key market if it makes a commercial discovery of the product as it angles to start test – well – drillings next year.

The firm has made extensive progress since obtaining the special grant to explore for oil and gas in Muzarabani facility, situated on a 100 – hectare piece of land.

Recent reinterpretation of data gathered by global oil giant, Mobil, in the early 1990s using modern technology, yielded very encouraging evidence supporting possible existence of oil and gas deposits in Muzarabani.

Mines and Mining Development Minister Winston Chitando, is on record saying the huge investment that will soon go into drilling test wells at Invictus Energy’s Muzarabani prospective, demonstrated the huge confidence investors have in the project.

Many investors eying multi-billion dollar projects are warming up to Zimbabwe following President Mnangagwa’s “Zimbabwe is open for business mantra”. Also recent manoeuvers to raise over US$3.5 billion compensation fund for white former farmers and Government’s commitment to address the issue of land that was owned under Bilateral Investment Promotion and Protection Agreements (BIPPAs), have been described as icing on the cake.

Further, Minister Chitando said amid the high optimism for commercial discovery in Muzarabani, Government had completed a production sharing agreement (PSA) draft with Invictus, the holder of 80 percent stake in the project, and terms of the deal presently are under review.

It is expected that commercial discovery of oil or gas in Muzarabani will be a serious game changer for Zimbabwe, as it will ensure energy security, growth of exports, creation of new jobs, industries and accumulation of revenue to Government among other benefits.

Invictus will drill two of the country’s first ever oil and gas test wells in October next year, at an estimated cost of US$20 million.

Already, Invictus has signed offtake agreements with Zimbabwe’s biggest fertiliser producer, Sable Chemical and Tatanga Energy, which is pursuing a gas to power project.

Invictus Energy director Paul Chimbodza, said in an interview that South Africa is currently getting supplies of gas from the Tande Temane gas fields in neighbouring Mozambique, which are fast depleting.

He said with the Tande Temane gas fields running out, new gas sources were being developed at Mozambique’s Rovuma gas fields.

But the distance and pipeline infrastructure required to supply South Africa from this area make Mozambique a more expensive proposition than Zimbabwe’s.

“South Africa is a significant market (for Zimbabwe). South Africa is looking to decommission 10 000 megawatts of coal fired plants and will need to replace that with cleaner alternative energy,” Mr Chimbodza added.

South Africa’s Integrated Resource Plan (IRP) of 2019 enables industrial users to generate power for their own use and to accelerate the purchase of power from independent producers, including from neighbouring countries through the Southern African Power Pool (SAPP).

Eskom is targeting to purchase up to 5 000 MW in the near term, which provides scope for Invictus to supply further gas volumes and become a major energy provider to the region.

Natural gas is becoming increasingly important to the economies of southern Africa as a clean, reliable and affordable energy source.

Studies have proved Muzarabani to be a potential multi-trillion cubic feet gas and multi- billion barrel condensate prospective.

The project dovetails into Government’s ambitions to grow the extractives sector from a US$3,6 billion to a US$12 billion industry by 2023, revenues experts say were achievable.

Presently, gold is the single biggest foreign currency earner, followed by tobacco. Other key foreign currency earners include platinum, chrome and tourism.

Invictus announced in December last year entered into a non-binding memorandum of understanding (MoU) with private developer, Tatanga Energy, to supply gas for a 500MW gas-to-power plant project in the event of a commercial discovery.

The proposed Gas to Power plant will be built in two phases with the first phase estimated at plus or minus 150MW and the second phase consisting of an additional plus or minus 350MW.

The potential gas supply of up to 100 million cubic feet per day for 20 years is a substantial volume, which will underpin the development of any commercial gas discovery to be in the Cabora Bassa Project.-ebusinessweekly