‘You can only de­clare oil af­ter drilling a well’

The Herald (Zimbabwe) - - Cartoon, Q & A, Opinion -

In­vic­tus En­ergy Ltd, an oil and gas ex­plo­ration firm, has made more progress than Mo­bil did in its stud­ies of the prospec­tive oil de­posits in the Muzara­bani basin in the 1990s. The com­pany has bet­ter knowl­edge of the Muzara­bani basin which has a sim­i­lar ge­o­log­i­cal struc­ture to Uganda and Kenya, where oil has been dis­cov­ered. In­vic­tus says there are in­di­ca­tions of a “work­ing petroleum sys­tem” and will sink an ex­plo­ration well in 2020 at a cost of $20 mil­lion. Here, our Se­nior Re­porter Tendai Mu­gabe (TM) speaks to Mines and Min­ing De­vel­op­ment Min­is­ter Win­ston Chi­tando (WC) about the pres­ence of oil and gas in the Cab­ora Bassa Basin that is rich in hy­dro­car­bons.

0TM: Can you give us a brief back­ground re­lat­ing to the Muzara­bani oil and gas project?

WC: In the 1990s, Mo­bil Oil con­ducted an ex­plo­ration in what we call the Greater Muzara­bani Area. We call it the Greater Muzara­bani Area in the sense that the ex­plo­ration that they con­ducted cov­ers not only the area in ques­tion where In­vic­tus is do­ing work, but ar­eas beyond that. They then con­ducted ex­ten­sive geo-phys­i­cal work which in­cludes aerial mag­netic sur­veys. The data from that ex­plo­ration work, they left a copy of that data in the cus­tody of Govern­ment in line with the agree­ment they had signed with Mo­bil. So they left the data which is stored in mag­netic tapes which are un­der the cus­tody of the Min­istry of Mines. TM: It’s now more than 20 years af­ter Mo­bil Oil con­ducted that ex­plo­ration. What has hap­pened now that has trig­gered Govern­ment’s in­ter­est to re­vive that project? WC: In line with our mantra that Zim­babwe is open for busi­ness, what then hap­pened is that Govern­ment fa­cil­i­tated In­vic­tus through their lo­cal part­ners called Geo As­so­ciates, to come and ac­cess the data which Mo­bil gen­er­ated when they did their ex­plo­ration.

TM: And what has In­vic­tus done with that data?

WC: That data was sent to two sets of con­sul­tancy, one of them a com­pany based in the United States of Amer­ica called Nether­land, Sewell and As­so­ciates Inc, in ad­di­tion to In­vic­tus do­ing work di­rectly them­selves. They ac­tu­ally have a team in Harare at the mo­ment do­ing that work. The geo-phys­i­cal work has been done, the aerial mag­netic sur­vey of the area was done al­ready. All the work now in­volves the re-in­ter­pre­ta­tion of the data that Mo­bil gen­er­ated. So, In­vic­tus re-in­ter­preted the data and from that re-in­ter­pre­ta­tion they then es­tab­lished a re­source of 680 mil­lion bar­rels of oil. The other 180 mil­lion is made up of two forms of ex­is­tence. TM: What are those two forms of

ex­is­tence? WC: Here we are talk­ing of a re­source which has got oil and which has got gas. The oil is straight for­ward. With oil you just take the oil and put it through a re­fin­ery and, de­pend­ing on the char­ac­ter­is­tics, you can con­vert it ei­ther to petrol or diesel. But with gas, ba­sics in the­ory there are three main uses of gas. It can be used for big users or off tak­ers of that gas, se­condly it can be used for power gen­er­a­tion be­cause it be­comes quite cheaper and thirdly that gas can be con­verted into oil and pro­cessed in the nor­mal man­ner. TM: In sim­ple terms, may you ex­plain how In­vic­tus man­aged to es­tab­lish that there are oil re­sources in Muzara­bani? WC: There have been re­cent dis­cov­er­ies of oil and gas in ge­o­log­i­cal for­ma­tions sim­i­lar to the ones we have in Muzara­bani and th­ese have taken place in Uganda and Kenya. As a re­sult of that, there has been more knowl­edge gained tech­ni­cally from those dis­cov­er­ies. Se­condly, what hap­pens is that re-in­ter­pre­ta­tion is done us­ing (ad­vanced tech­nol­ogy) soft­ware; it’s not man­ual and there has been more mod­ern in­ter­ro­ga­tion too which has been de­vel­oped post-Mo­bil ex­plo­ration, hence the abil­ity of In­vic­tus to de­ter­mine the re­source now. The area we are talk­ing about is about 200 square kilo­me­tres. That is the size. In that 200 square kilo­me­tres what hap­pens is they want to de-risk by drilling a well. It is very ex­pen­sive to drill that well and it costs about US$20 mil­lion and we are talk­ing of 300 mil­lime­tre di­am­e­ters up to about four and half kilo­me­tres deep. It means that in that whole 200 square kilo­me­tres, what you want is to de-risk and con­firm — drill at the best site so that you make sure you have done ex­ten­sive geo-phys­i­cal work on that whole 200 square kilo­me­tres. But in the process of do­ing that geo-phys­i­cal work there is a chance of fur­ther in­creas­ing the size of the in­dica­tive re­source. There is some fur­ther work to be done. The whole idea is by mid next year to have ze­roed in and say we will drill the well in this par­tic­u­lar place and the well is drilled and once it is con­firmed then we are in busi­ness. TM: So, can we safely say Zim­babwe has dis­cov­ered oil? WC: We are past that. It’s a ques­tion now of fur­ther con­fir­ma­tion. In oil tech­ni­cal terms, there is what is called es­tab­lish­ment of a prospec­tive re­source and there is what is called a dis­cov­ery. In oil tech­ni­cal terms, the way things are done, you es­tab­lish a prospec­tive re­source and there is a def­i­ni­tion of what is a prospec­tive re­source. It’s quite a suc­cess to es­tab­lish a prospec­tive re­source. But you only de­clare a dis­cov­ery when you have drilled a well to con­firm the prospec­tive re­source. There is a dis­cov­ery in lay­man’s terms and there is a dis­cov­ery in tech­ni­cal terms. From the anal­y­sis and re-in­ter­pre­ta­tion, a prospec­tive re­source is now known and the quan­tity. But to call it a dis­cov­ery, it en­tails the sink­ing of a well. TM: When should we ex­pect the

drilling of that well? WC: The pro­jec­tion is that by mid 2020 we should have drilled the well, then we will take it from there. TM: Can you tell us who In­vic­tus is be­cause there have been un­ver­i­fied re­ports that it is just a brief­case com­pany? WC: In­vic­tus is a spe­cial pur­pose ve­hi­cle es­tab­lished for the pur­pose of rais­ing money to ex­ploit this re­source. Mod­ern work­ing style in the West is that peo­ple don’t work in of­fices, but from home. And in this case its re-in­ter­pre­ta­tion of work that has al­ready been done. What you need is ex­perts who as­sist us­ing mod­ern tech­nol­ogy and those ex­perts are here in Harare. TM: What role is Govern­ment

play­ing in this whole project? WC: Govern­ment comes in as a fa­cil­i­ta­tor and reg­u­la­tor, but also most coun­tries that pro­duce oil sign pro­duc­tion shar­ing agree­ments with com­pa­nies. So, that is how Govern­ment comes in. In­vic­tus has also com­mit­ted to do a pro­duc­tion shar­ing agree­ment with the Govern­ment of Zim­babwe.

Min­is­ter Chi­tando

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