eBusiness Weekly
Kudzanai Sharara
Australian petroleum company, Invictus Energy Limited, which recently confirmed the potential of oil in Muzarabani, Cabora Bassa Basin, in Mashonaland Central, says it is still in the early stages of an exploration programme, but expects to inject billions of dollars into the project depending on the number of wells to be drilled.
Although the firm say it is still at stages that include geophysical interpretation and geological modelling of the subsurface, it has already spent over $1 million on its pre-work studies.
Reiterating that the company has not discovered oil as yet, Invictus Energy Limited (Invictus) managing director, Scott Macmillan, said early stage exploration involves acquiring and interpreting geophysical data such as seismic, gravity and aeromagnetic data that allows you to “see” below the surface.
“I understand people are excited, but we have some further work to do before we commence our exploration drilling. The conventional oil and gas prospects we are targeting are approximately 2,0 to 4,5 km beneath the surface,” he said.
Macmillan said the studies, which have been going for more than a year already will take another 6-12 months before drilling can commence, provided there is no need to acquire any further data.
“At this point we are reprocessing and reinterpreting the seismic data acquired by Mobil. This data is being transcribed from magnetic tapes into digital formats and then reprocessed using new techniques and computing power, which has advanced significantly in the last 25 years and we expect to obtain a much clearer image of the subsurface.”
Macmillan said once these studies have been completed, Invictus will then choose the best prospect with the best chance of making an oil or gas discovery.
“At this point we believe it is the Muzarabani Prospect, but we may identify others as well during our work programme, which could be better candidates for drilling. However, we are pretty encouraged from our work so far,” Macmillan said.
How much will it cost?
Invictus, which has already spent around $1 million in its first year and will spend another $1,5 million or so to conclude the rest of its studies work is expecting to spend between $10 to $20 million for each well to be drilled at the Muzarabani Prospect.
“We expect the drilling to cost between $10 – $20 million for each well we drill depending on the depth. If we make a discovery, however; the total investment will then be measured in billions including wells, processing facilities, pipelines and associated infrastructure over the life of the project,” said Macmillan.
Drilling for conventional oil and gas is very expensive (tens of millions for each well) due to the depths involved which requires specialised drilling equipment and personnel to run the drilling activities, said Macmillan.
He, however, reiterated that before advancing to the drilling stage, there is still need to conclude technical work before drilling “so we can select the best prospect to drill which maximises our chance of making an oil or gas discovery for the country.”
Macmillan said his company was fortunate in that the data set acquired by Mobil is excellent and the magnetic tapes the data is stored on is in good condition. The data is being transcribed to digital format before reprocessing and reinterpreting it.
Why did Mobil abandon project?
Macmillian said Mobil had not followed through with the Muzarabani, Cabora Bassa Basin because at the time of exploration, it was very difficult to commercialise gas in the region.
“Mobil did an excellent job exploring the basin before, they simply believed that it was more likely to contain gas rather than oil. Twenty-five years ago it was very difficult to commercialize gas in the region.
“The Pande and Temane gas fields in onshore Mozambique were discovered in the late 1950s and early 1960s and lay idle. So from Mobil’s point of view, there was little point in discovering more gas because already discovered gas fields were not being developed.
“They were only developed in the early 2000s by Sasol who now pipe the gas 900km down to South Africa,” said Macmillian.
That picture has now changed in terms of being able to monetise gas as there are numerous options available.
“That’s why we decided to acquire the acreage. Now that we have been conducting our technical studies and reviewing the data with fresh eyes and the benefit of new discoveries that have been made elsewhere onshore Africa and new technology to process the data, we believe that there is potential for oil in the basin too due to the similar characteristics that the Cabora Bassa Basin has to other successful basins in Uganda and Kenya.”
Macmillian said those basins had also been written off by companies that explored them previously, but geological understanding and technology constantly improves and new insights were developed from reprocessing and in some cases acquiring additional data, which lead to successful exploration drilling and those discoveries in the early 2000s in Uganda and 2012 in Kenya.
Why does it take so long?
Macmillan said the ongoing studies might take so long because oil and gas exploration is highly technical and specialised and takes a significant amount of time to study the basin and petroleum system and integrate all the geological and geophysical data.
He explained that unlike mining exploration where companies are on the ground “pretty” quickly where often the mineral has a known occurrence particularly in Zimbabwe due to the long mining history, for oil and gas initial work relies on geophysical studies before drilling can commence.
“I can understand the skepticism of people and the concerns that it could end up the same way as other failed projects. I am Zimbabwean myself, grew up and went to school in Bulawayo and my family is still there. I am a patriotic son of the soil and would desperately love to see Zimbabwe rise again.
If the country is fortunate enough to make an oil or gas discovery, Macmillan said, then all Zimbabweans are going to benefit though taxes, royalties and jobs from the huge amount of infrastructure that would be required to develop the resource responsibly.
Macmillan who has worked in the oil and gas industry in Australia, said he has how it can transform economies if it is managed correctly.
“I am very proud and very fortunate to be able to run a company focused on Zimbabwe in an industry that I am passionate about and has given me a career I didn’t dream of growing up and be able to bring skills and expertise and investment back to the country and fly the flag high.
Ministries involved
Both the Ministries of Mines and Mining Development and Energy and Power Development are involved and in constant touch with Invictus.
The two ministries provided letters of support when Invictus was applying for Zimbabwe Investment Authority (ZIA) licence.
