Zimbabwe pins hope on oil findings

Zimbabwe may start producing its own diesel and petrol within the next 10 years following encouraging exploration findings by Australian company, Invictus Energy, in the Muzarabani area, a Cabinet minister has said.

Discovery of oil, which appears highly likely as evidenced by the results of extensive evaluation of existing and new data using latest technology, will be a major breakthrough for a resource dependent economy facing acute fuel shortage amid crunch foreign currency shortages.

African countries that produce oil frequently run financial surplus on their national budgets while those that import have to pay substantial amounts for oil imports.

The African Development Bank says high oil prices can negatively affect economic growth by constraining key sectors such as agriculture and manufacturing.

Mines and Mining Development Minister Winston Chitando told a Chamber of Mines conference in Victoria Falls last week that Zimbabwe was headed in the right direction regarding exploration for petroleum oil.

This comes as Government has set the target of growing the country's mining sector into a US$12 billion industry by 2023, which forms part of broad interventions towards achieving the Government's vision, espoused by President Mnangagwa, of transforming Zimbabwe into an upper middle-income economy by 2030.

"The US$12 billion (target) does not include the oil. It is a quoted company (doing exploration), so I will not divulge much, suffice to say Zimbabwe is headed in the correct path in terms of having an oil industry.

"Zimbabwe is headed in the correct path in ensuring that by 2030, we have our own diesel, oil being produced from the resources we have," the Minister said to wild applause.

Zimbabwe needs to import all petroleum requirements although pads out petrol with ethanol produced from home-grown sugar cane. Petroleum fuels are the country's largest single import and besides condensate the find includes natural gas that can generate electricity.

Minister Chitando said through the "Zimbabwe is Open for Business" mantra, part of Government focus entailed attracting global capital into mining, including petroleum. To this end, Australia Stock Exchange listed firm, Invictus Energy, had made huge strides towards giving Zimbabwe its own diesel and petrol.

Newly defined data released by Invictus Energy in April this year, provided management with increased confidence regarding a sizeable increase in the prospective resource estimate of the Muzarabani oil prospect that currently stands at 3,9 Tcf (trillion cubic feet) and 181 million barrels of condensate.

The seismic data, which is now final, was described by Invictus Energy managing director Scott Macmillan as exciting and encouraging. Mr Macmillan said the results have enabled Invictus to specifically identify multiple trap geometry configurations that can be mapped along the basin margin fault.

These "String of Pearls" play types possess similar characteristics to prolific interior rift basin petroleum systems in Uganda, Kenya and South Sudan.

Invictus is undertaking exploration in the Cahora Bassa basin, which encompasses the Muzarabani Prospect, a multi-TCF conventional gas condensate target, which is potentially the largest, undrilled seismically defined structure onshore Africa.

Oil discoveries in Uganda and Kenya in recent years have raised hopes that East Africa can follow the lead of several other African nations and become major oil producers.

Minister Chitando said the Government's target of a US$12 billion industry by 2023 was not far-fetched, but realistic given the series of planned interventions in gold, platinum, diamonds, chrome and coal.

"So, the US$12 billion industry which we are talking about is not a dream, but it's a reality, which we are in the process of achieving," he said, adding the target will be underpinned by mineral specific policies.

Government, the minister said, was working on interventions to grow gold production from 34 to 100 tonnes by 2023, platinum from 14 to 50 tonnes, growing coal to export product and liquid fuels and value adding chrome to stainless steel and carbons.