April 22, 2024
Economy

Zimbabwe Banks On Oil And Gas Finds To Rescue Economy


Zimbabwe’s mines minister on Monday said the discovery of oil, helium and hydrogen in the remote northeast would revive its ravaged economy.

Zimbabwe has the world’s highest inflation rate and the economy has been on a downturn for more than two decades.

Annual inflation stood at 47.6 percent in February — its highest level in six months.

Australian oil and gas firm Invictus Energy last year announced the discovery of oil and gas in the northeast, some 30 years after US giant ExxonMobil gave up its quest to secure crude oil in the area.

“Zimbabwe is on course to be counted as a player in the oil and gas industry,” Soda Zhemu told reporters.

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“There are unimaginable spin-offs to the economy and for Zimbabwe at large from the oil and gas extraction and attendant value-chain activities” he said.

Announcing fresh laboratory results, Zhemu said he “confirmed the presence, not only of natural gas, but also of light oil condensate as well as helium and hydrogen” at the Mukuyu well.

Helium is a key component in the manufacture of semiconductors, liquid crystal display (LCD) panels and fibre optic wire.

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Soda said the natural gas was of high quality while the oil was of a superior quality that needed less refining. Light oil produces diesel, petrol as well as aviation gas.

Neither the minister nor the company disclosed the quantities of the find.

The find could lead to Zimbabwe’s first gas production and help improve power supplies in a country plagued by blackouts.

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The southern African nation, which faces endemic poverty, suffers outages of up to 19 hours a day.

Invictus Energy signed the exploration, development and production deal with Zimbabwe in 2018, which is entitled to as much as 60 percent of the project’s output under an agreement.

Many companies, especially those in manufacturing, have either pulled out or downsized due to high operating costs.

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