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Invictus Energy has discovered gas in Zimbabwe, raising hopes the landlocked southern African nation could become a producer decades after ExxonMobil abandoned a explore for oil in the region.
The Australian-based company said four samples from a well in the north had shown the presence of gas in a country that has suffered severe power shortages and endured years of economic hardship.
Shares in Invictus surged 28 per cent to A$0.20 on Thursday — the highest daily rise in a year, although from a low base.
“The discovery represents one of the most significant developments in the onshore southern Africa oil and gas industry for decades,” said Scott Macmillan, managing director of Invictus.
Sydney-listed Invictus, which used data collected by Mobil before it merged with Exxon, will drill more wells at the Cabora Bassa project to find how much gas there is there — and production could be years away.
Viable gas for energy generation could help relieve the power shortages that have caused big disruptions for major miners operating in the country.
At present, platinum producers, including a unit of Anglo American, Chinese-backed lithium miners and gold companies have to pay to import electricity from abroad.
The tip of Africa has seen a renaissance in oil and gas exploration since Mozambique, Zimbabwe’s neighbour, discovered vast offshore gas finds more than a decade ago.
Discoveries onshore, where resources could be plugged into local industrialisation and not just exported to world markets, remain rare.
TotalEnergies and Shell are among the investors betting on deepwater oil discoveries in Namibia. South Africa is hoping to tap gas off its coast.
Zimbabwe might appear an unlikely candidate to combine them given its forbidding reputation for abuse of resource wealth and political chaos that has persisted since the downfall of Robert Mugabe in a 2017 coup.
Under Emmerson Mnangagwa, who was elevated to power by Zimbabwe’s military and was re-elected as president in a disputed vote this year, the country’s wealth in gold and diamonds remains tainted by allegations of systemic looting. Mnangagwa’s ruling Zanu-PF has been in power since independence in 1980.
“Historically, natural resource extraction in Zimbabwe has tended to only benefit a political elite, often at the expense of local communities and ordinary citizens, and failed to translate into development gains,” said Zimbabwe’s Centre for Natural Resource Governance in a report on the gas exploration project this year.
Invictus’s Macmillan said that gas by its nature was less susceptible to these risks. “Gas is a different type of resource because you need pipelines, infrastructure and long-term customers,” he said. “It’s a very different scenario from precious metals, which are fungible” and proceed more easily.
Zimbabwean pension funds are among the investors in Invictus and the company and the project will eventually need a production-sharing deal with the Zimbabwean state.
Mobil stopped exploring because “they thought that there was no way for them to commercialise gas, which was true in the early 1990s”, Macmillan said. Due to the power crisis, “we live in a very different environment now from a commercialisation perspective”.
“Often with gas developments, you have to expect for customers and markets. There are existing consumers [in Zimbabwe] who are paying hard cash to import electricity,” he added.
