Zimbabwe Pins Economic Recovery Hopes on Newly Discovered Oil and Gas Reserves

March 5, 2024
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In a major announcement on Monday, Zimbabwe’s Mines Minister highlighted the discovery of oil, helium, and hydrogen in the country’s northeast, marking a pivotal moment for its struggling economy. Zimbabwe, grappling with the highest inflation rate globally, sees this breakthrough as a key to reversing its economic fortunes after enduring over two decades of financial hardship.

The inflation rate in Zimbabwe soared to 47.6 percent in February, the highest in six months, underscoring the urgent need for economic revitalization. The discovery by Australian oil and gas company Invictus Energy comes decades after ExxonMobil’s unsuccessful attempt to find crude oil in the same region.

Mines Minister Soda Zhemu expressed optimism about Zimbabwe’s future in the oil and gas sector, emphasizing the significant benefits expected from extraction and related activities. He announced recent lab results confirming the presence of light oil condensate, natural gas, helium, and hydrogen at the Mukuyu well, with helium being crucial for semiconductor, LCD panel, and fibre optic wire manufacturing. The minister praised the high quality of the natural gas and the superior grade of oil, which requires minimal refining and is used to produce diesel, petrol, and aviation gas.

Details regarding the quantity of the find were not disclosed by either the minister or Invictus Energy. However, this discovery could initiate Zimbabwe’s first gas production, potentially alleviating the country’s severe power shortages. Zimbabwe, facing widespread poverty, experiences blackouts lasting up to 19 hours daily.

In 2018, Invictus Energy entered into an exploration, development, and production agreement with Zimbabwe, entitling the nation to up to 60 percent of the project’s output. This development offers a glimmer of hope for revitalizing Zimbabwe’s economy, particularly benefiting the manufacturing sector, which has seen numerous companies exit or downsize due to high operational costs.