Invictus eyes early monetisation of gas

24 Mar, 2024 - 00:03 0 Views
Invictus eyes early monetisation of gas INVICTUS ENERGY, the Australian firm that recently discovered natural gas in Mbire, northern Zimbabwe, is exploring options for early monetisation of its hydrocarbon reserves

The Sunday Mail

Business Reporter

INVICTUS ENERGY, the Australian firm that recently discovered natural gas in Mbire, northern Zimbabwe, is exploring options for early monetisation of its hydrocarbon reserves.

This follows two recent expert analyses that confirmed deposits and certified the hydrocarbon deposits as having very few impurities.

The low impurity content in the condensate gas, a form of light oil, means little investment is required for processing before selling it to the final consumer.

This enables Zimbabwe to become a producer of natural gas energy in various forms, such as electricity, petrol and diesel; and petrochemical products like plastics, soaps, detergents, solvents, drugs, fertilisers, pesticides and explosives.

Senior officials have previously mentioned early monetisation options, including a gas-to-power plant to address Zimbabwe’s electricity challenges.

This would also generate significant revenue for the Treasury. The Government will have a sizeable share of proceeds through a petroleum production sharing agreement, currently being finalised (a global practice in the petroleum sector).

For example, in 2023, Nigeria received the highest payments from Shell in the form of production entitlements, royalties, taxes and fees totalling US$4,92 billion — the highest figure recorded in four years.

Invictus recently updated its memorandum of understanding with local firm Mbuyu Energy for the supply of gas to power a 500-megawatt (MW) gas-to-power project. Once fully developed, the plant could generate up to 1 000MW. To produce such power, 1,4 trillion cubic feet of natural gas would be required.

This power generation would support further integration of renewable energy sources into Zimbabwe’s overwhelmed national grid and the Southern Africa Power Pool (SAPP).

In a statement on Friday, Invictus CEO MScott MacMillan said the analysis results, while consistent with the firm’s basin modelling, exceeded expectations.

The discovery was historic, representing the first-ever instance of hydrocarbons discovered in Zimbabwe, a country also rich in other minerals like gold, lithium, diamonds and platinum.

Announcing results from the latest fluid sample analysis, Mr MacMillan confirmed a substantial rich gas-condensate discovery at the Mukuyu field. This sets the company up for continued success in the Mukuyu Upper and Lower Angwa geological trends.

“The samples demonstrate a consistent, high-quality natural gas composition with low inert content, less than 2 percent CO2 (carbon dioxide) and nil H2S (hydrogen sulfide), which will require minimal processing for sale,” he said.

“In addition to gas condensate proven in the Upper and Lower Angwa formations, we have further evidence of the presence of light oil in the Upper Angwa and potentially Dande formation from multiple hydrocarbon source rocks and charge events.”

Initial analyses suggest the hydrocarbons present in the Mukuyu field were generated and expelled from both local source rock intervals within the Mukuyu structure and migrated from other source rock-rich areas off-structure.

“These results bode well for the presence of hydrocarbons in the prospects and leads in the remainder of the company’s acreage, which has been derisked by the Mukuyu gas-condensate discovery,” Mr MacMillan continued.

Global petroleum research firm Wood Mackenzie classified the Mukuyu gas finding as the second-largest petroleum reserve in Africa in 2023.

Mukuyu’s estimated resource is 230 million barrels of oil equivalent (boe) (1,3 trillion cubic feet), following two gas discoveries from the Upper and Lower Angwa geological reservoirs declared by Invictus in December 2023.

Wood Mackenzie’s review also noted that regional exploration yielded seven discoveries from a total of 17 wells drilled across the continent in 2023, with Invictus accounting for two of them.

The Mukuyu field has a structural closure of over 200 square kilometres, and independent estimates place the resource at 20 trillion cubic feet of gas and 845 million barrels of conventional gas condensate.

“The gas-condensate composition results are exceptionally positive and exceeded our pre-drill expectations with high-quality, liquids-rich gas with low inerts found in both Mukuyu wells,” Mr MacMillan said.

“This allows us to target a low-cost early monetisation development with minimal processing of the gas at the surface from the Mukuyu field.”

Early monetisation of the oil/gas project could bring significant relief for Zimbabwe, which already struggles to meet half of its national power demand, peaking at 2 200MW, especially during winter.

Zimbabwe’s power deficit is managed through imports, which can result in power outages lasting for several hours, disrupting commercial and household activity.

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