BY FIDELITY MHLANGA
ZIMBABWE needs to expeditiously reform its legal and fiscal regime governing the use of petroleums to allow for a policy shift focusing on increased use of renewable energy amid plunging global investment in hydrocarbons, an energy expert has said.
Nicolas Bonnejoy, a partner at London-based Asafo and Co, which has vast experience in oil and gas projects, said global oil and gas capital expenditure was plummeting and Africa’s share was equally going down. He said there was less investment in the oil and gas sector as the world transitions towards renewable energy.
“There is significant competition for a limited amount of oil and gas investment in 2021 and only the most geologically attractive setups will attract investment. An attractive geology is a must to attract investment while a poorly designed regime will deter investment,” Bonnejoy said at the Chamber of Mines conference in Victoria Falls, last week.
“The appetite is too low because of the transition to renewable energy. The energy mix will change over the coming decade. The world will be getting rid of hydrocarbons soon. You don’t need to be scared but understand that investment will not come easily in oil and gas.”
He added: “The potential of investment remains but there is less money than what used to be in the past. The exit strategy will depend on how the government regulates and controls the sector so that investors benefit. The potential is there but the only concern is that there is not as much money as it used to be in the past.”
Renewable energy is the fastest-growing energy source globally and in the United States. Renewables made up 26,2 % of global electricity generation in 2018 and is expected to rise to 45% by 2040.
Most of the increase will likely be sourced from solar, wind, and hydropower.
Bonnejay speaks as Invictus Australia Stock Exchange-listed oil and gas explorer, Invictus Energy is undertaking oil and gas exploration in Muzarabani.
In March, the outfit raised about US$6 million for the project. But the company’s technical director Brent Barber told this publication that the company has so far injected US$4,5 million towards exploration.
Invictus intends to conduct, process and interpret a minimum of 400 line km of 2D seismic in order to refine the Muzarabani-1 drilling location and well path.
The southern Africa-focused Australian firm, which has been exploring for oil/gas on swathes of the Zambezi Basin forests since 2015, has said it could be sitting on Africa’s largest find.
Invictus Energy and the government signed a Petroleum Exploration Development and Production Agreement (PEDPA). Under the PEDPA, Invictus Energy was granted rights to undertake production for the next 25 years and the project was granted a Special Economic Zone status.
Deliberations are already underway to finalise the Petroleum Production Sharing Agreement (PPSA). The PPSA will, among other salient matters, spell out the sharing ratios that will accrue to Invictus, the government and other stakeholders on oil output and profits.