AUSTRALIA-based oil and gas exploration company Invictus Energy Limited (IEL) will tomorrow release initial estimates of how much oil or gas deposits there could be in Muzarabani, Mashonaland Central province, pending exploration to confirm its discovery.
BY TATIRA ZWINOIRA
This follows an announcement by President Emmerson Mnangagwa on Thursday last week of a discovery of oil and gas deposits along the Muzarabani Basin.
Invictus Energy Limited immediately shot down the discovery claims the following day.
“I can understand some of the confusion because it is not well understood here and perhaps that is something that can be articulated better. The findings that the President (Mnangagwa) was referring to were supposed to be released today (Friday), but were held up because we had to provide some additional information to the ASX (Australian Securities Exchange) before the prospectus resource estimate could be released. This will now be released on Monday (tomorrow),” IEL managing director Scott Macmillan told Standardbusiness on Friday in a phone interview.
“You cannot definitively say (that oil and gas exist). You get evidence that points to them (gas and oil) being there because from the images you acquire from seismic data and basic modelling studies that you have of all the ingredients being there. The main question is whether the timing for all those elements being in the right place at the right time have all worked.
“This is because the age of the ‘upper angwa target’, the name of the rock formation we are focused on is around 220 million to 230 million years old and so that is a long period of time for all of those things to have worked together. At this stage, as is required, you have to prove it by discovering, drilling or bringing it to surface.”
He said the definition of a discovery was basically the movement of hydro-carbons to the subsurface where the targeted oil or gas generation could be, which would have migrated up into a reservoir and be trapped in place, which was only possible after exploration.
The estimates will be part of the “Prospective Resource Estimates for the Mzarabani Prospect” wherein the company identified possible undiscovered accumulations of oil and gas with initial estimates pointing to more of the latter.
“The way you make those estimates is based on the geophysical and geological interpretation… We have taken samples of that and measured organic content to estimate how deep it is and how much oil or gas it is capable of generating, which is determined by how deep it has been buried and at what temperature over the last 230 million years,” Macmillan said.
“It is based on those measurements of oil and gas the source rock is capable of generating over that period of time which is called the ‘basin modelling process’ depending on how deep it has been buried and the type of source rock it comes from … It will have different properties depending on what type of environment it comes from and what temperature it has been through.
“You are going to generate oil from the source rock at above 60 degrees celsius, which is the function of depth, how deep it has been buried and the thermal gradient in that local area. For gas, it is about 100 degrees celsius, so we think we have been at some point over that 100 degree threshold and another time over the last 230 million years been within the oil window.”
In terms of investment, Macmillan said from discovery to production should Muzarabani have gas or oil deposits, it could cost anywhere between millions to billions of dollars, which is why they would seek a partner at a later stage.
“There is not a lot of activity on the ground and that is because these potential fields are 2,5 kilometres beneath the surface, so we cannot do anything on the ground in Muzarabani…so we will continue with interpretation work. In terms of drilling for oil or gas, the first well will cost probably around $20 million and if it is successful we will be drilling a lot more, so you are talking about probably dozens of wells,” he said.
“In terms, of developing the infrastructure once it comes out of the ground, you are talking about hundreds of millions to billions of dollars. These projects have a life span of 20 to 40 years depending on how big the field is.”
Macmillan described it as a capital-intensive industry, requiring a lot of capital and offered no guarantees that something could be found which is why in the future they would consider bringing in another partner to manage the risk.
“Generally speaking, from discovery through to production onshore, you are looking at somewhere between three to five years,” he said.