Zimbabwe is abundantly blessed with natural resources, boasting over 60 identified reserves and a wealth of yet-to-be-explored deposits. A significant economic transformation is imminent, driven by recent discoveries of precious metals and resources that have the potential to reshape the country’s economic landscape. The emergence of these new findings is particularly crucial for Zimbabwe, given the pressing need to address energy challenges that have been adversely impacting productivity across vital sectors.
In recent positive news, Invictus Energy has unearthed promising gas deposits in Zimbabwe, sparking optimism that the landlocked nation in southern Africa may become a gas producer, years after ExxonMobil abandoned oil exploration efforts in the region. The Australian-headquartered company reported the identification of gas in four samples extracted from a northern well in a country grappling with persistent power shortages and enduring economic challenges.
Following the discovery, shares in Invictus experienced a notable 28% surge to A$0.20 recently, marking the highest daily increase in a year, albeit from a relatively low starting point. Scott Macmillan, the managing director of Invictus, remarked that this finding is one of the most significant developments in the onshore oil and gas industry in southern Africa in decades.
Leveraging data inherited from Mobil before its merger with Exxon, the Sydney-listed company plans to conduct additional drilling at the Cabora Bassa project to assess the extent of the gas reservoir, with potential production lying several years ahead. The prospect of viable gas resources for energy generation holds the promise of alleviating the power shortages that have posed challenges for major mining operations in the country.
Currently, platinum producers, including an Anglo-American unit, lithium miners with Chinese backing, and gold companies in the region are compelled to incur expenses for importing electricity from foreign sources. This situation prevails even though Southern Africa, particularly following Mozambique’s discovery of extensive offshore gas reserves over a decade ago, has witnessed a resurgence in oil and gas exploration.
However, onshore discoveries, which hold the potential for contributing to local industrialisation rather than solely catering to global markets, remain relatively uncommon. Noteworthy investors such as Total Energies and Shell are placing their bets on deep-water oil findings in Namibia, while South Africa is actively pursuing gas extraction off its coastal areas. This marks a strategic shift, aiming to bolster domestic energy resources and reduce dependence on imported electricity for key industries like platinum, lithium, and gold mining.
“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 move 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 wait for customers and markets. There are existing consumers [in Zimbabwe] who are paying hard cash to import electricity,” he added
