eBusiness Weekly
While Zimbabweans can become excited about the prospects of a commercially viable gas and oil field in the Mzarabani area, following the latest reports by Invictus, the Australian company that has done sterling work on the data accumulated in the early 1990s, we need to be careful not to start counting barrels until someone has drilled a hole and confirmed that the gas and oil does in fact exist.
Invictus have done a lot of work that maps the geology of the area, finding a tier of around five traps that could, and if they follow the results from similar formations elsewhere should, contain gas and oil with the bulk in a trap around 3 000m below the surface. But Invictus have no certainty that there was gas and oil in the traps in the first place and that it has not subsequently leaked away. This is because no one has ever drilled a hole several kilometres deep into the Cabora Bassa basin.
All that we now know is that a deep rift valley, possibly a side rift from the main rift that was starting to form between India and Africa, was filling up with sand, pebbles, hopefully all sorts of decaying organic matter and critically layers of clay over a few tens of millions of years from the early Triassic, almost 250 million years ago. And that these layers folded a bit around 100 million years ago.
So now we need to find out if the transformed clay layers were good enough to trap gas and oil in the transformed sand and pebble layers. There are quite a lot of ifs. The geology is now known to exist; there are traps that could hold a mean estimate of around 200 billion litres of oil and more than 260 cubic metres of gas, although the traps might only be big enough to hold a third of those figures or be bigger than expected and be big enough to hold twice as much. What is not known if anything is trapped in the traps.
So the next stage, when we move from ifs to facts, is to drill the first hole and find out. And Invictus are honest enough to classify the chances of discovery as high risk. They need a partner who drills a lot of holes in the hope that some strike oil and so pay for the ones that don’t. By proving that the traps exist and are of adequate size to trap commercial quantities of hydro-carbons they are reasonably confident they will find the big enough risk taker, especially, as they point out, it will be easier than with most modern discoveries to extract the hydrocarbons since Mzarabani is on dry land and is close to quite decent infrastructure. And there are local markets.
So Zimbabwe now has to wait for the drilling by a risk-taker. And that is not instant.
Most people are keen to know if there is oil, but even if the traps did trap oil there will be gap of some years between the proof of that fact and petrol flowing. Extraction wells would have to be drilled and a refinery built.
The real pay dirt, what will pay the huge bills of exploration sooner, will be the gas. Already Sable Chemicals of Kwekwe, are very keen to be first in line to buy gas. They need it as feedstock although whether it would make more sense to process the gas at a new plant in Mzarabani or send it by pipeline across half of Zimbabwe probably still has to be calculated.
The second customer for gas should be an investor, perhaps Zesa perhaps someone else, willing to generate electricity from gas. A gas-fed power station is fairly cheap and simple to build. Basically it is a battery of jet engines driving generators, with the civil works being little more than a shed to keep out the rain and moderate the noise. With an assured supply of gas such a power station can be built in a few months. And the gas does not require fancy refining.
A gas station is cheaper to run than a coal thermal station and is almost as good as hydro-electricity for instant turn-on and turn off. Coal thermals need more than an hour to bring a boiler up from cold to producing enough steam to drive a turbine. A hydro station needs a couple of minutes to open an intake valve to get water plunging down a shaft to run a turbine and a gas station needs only a few more minutes to get its jet engine roaring and spinning the generator.
The cleaner gas stations require a lot less maintenance than coal stations, produce significantly less greenhouse gases, and the fuel delivery is a lot simpler. That is why the European nations with North Sea gas have closed almost all their coal thermals and why American utilities, with their cheap gas from fracking, are now converting coal stations to gas stations, to the annoyance of coal miners.
So if the test hole finds gas in the upper traps of the Mzarabani complex, this can be exploited and sold quite quickly, as it will solve a number of critical problems facing the Zimbabwean economy in the short-term, let alone the medium or long term, and will not require outlandish investments before the meters are ticking and producing revenue and cash flows.
Crude oil, the condensates that Invictus talks about, still has a growing market although estimates and projections suggest that oil demand will peak within a few years as electric vehicles start making their breakthrough, another reason why the gas in the traps might well be more important in the longer term than the oil. And we need to continually remember that petrol and diesel do not come out of the ground. They come out of complex and expensive refineries.
The Zimbabwean Government has been helpful in the Mzarabani work, and no doubt will move heaven and earth once the test drilling programme is in place to make it as easy and as simple as possible for this to happen. We might well have to upgrade roads into Mzarabani, but we should be doing that in any case since the people in the valley need decent communication so regardless of the results of a test drill this is money well spent.
And while we are doing our level best to smooth the path of potential investors we should also be careful to continue our other energy programmes, including the upgrading of Hwange Thermal, the encouragement of Rio Tinto for their thermal station, the building of the Batoka Gorge dam and power station, the exploitation of the coal bed methane in Matabeleland North, a resource we have known about for decades but have, for some reason, been reluctant to touch, and finally getting those solar stations we keep talking about built.
If we do what we are supposed to do, an oil and gas discovery in Mzarabani will be a very exciting and very useful icing on our cake. But we should not hang around doing nothing in the fairly long process of proving, or disproving, the potential resource and then exploiting it.
