I WANT to urge readers to take the business of O&G exploration in Zambia more seriously now, more than ever. There is no shortage of interested subscribers for O&G exploration blocks.
My earlier articles have highlighted some issues, but those issues are at elementary level, may or may not be of serious concern to the authorities for the reason that a successful bidder is one who has fully satisfied the requirements (Ts and Cs) set by the licensing authority. The licensing authority would want to see actions and results in addition to compliance.
This week, my spotlight is on Swala Energy (Zambia) Ltd, registered by PACRA in February 2012, with Mr Ken Russell as Chairman, and Dr David Mestres Ridge the C.E.O. Swala Energy (Zambia) Ltd is a subsidiary of Swala Energy Ltd headquartered in Perth, Australia. The company is listed on the Australian Securities Exchange. By June, Swala Energy (Zambia) Ltd was already applying for O&G exploration Blocks.
Before establishing presence in Zambia, Swala Energy Ltd set up shops in Kenya and Tanzania, jointly owning Block 12B in Kenya with Tullow Oil in a 50-50 arrangement with local partners. The partnership commissioned airborne gravity and magnetic survey works to underpin results of the initial field excursion. The partnership cross-correlated results of the passive seismic work with results of drilling done by partner Tullow and in other places in Kenya. They sought a more precise determination of the presence of the basement so the fill of the basin can then be estimated, and develop conceptual models which depict possible generation of hydrocarbon when temperature and pressure conditions vary. Using the same 50-50 equity arrangement, Swala Energy Ltd Australia went into Tanzania, and the company acquired two licences: Pangani and Kilosa-Kilombero and within the initial, already carried out aero-magnetic and airborne Gravity surveys over both license areas in Tanzania, in addition to data analysis of remote sensing programme and geochemical sampling. 2D seismic data acquisition which was scheduled to be completed by end of September 2013, has already commenced. Thus, their exploration areas lie within the East African Rift System (EARS), and presence of volcanics in the basin is a known feature. I can conclude that they have built massive knowledge of O&G occurrences in rift systems and capacity to locate the deposits. So far, they are not making any hurried conclusions whether or not O&G is present, but are building knowledge that is useful to get to that pronouncement.
The 2D seismic exploration surveys in two countries is in excess of US$2 million each, with expenditure on other operations being over US$1.3 million in Kenya, over US$1.2 million in Tanzania and just under US$1million in Zambia so far. I can also reasonably conclude that Swala Energy (Zambia) Ltd's interest in Block 31 and 42 is a natural, positive consequence as they have already generated data and information from other parts of the same Rift system, making comparisons a lot easier. Block 31 lies in the western arm of EARS. Swala Energy Ltd has still opened shop in Malawi, following the eastern arm of the EARS in blocks 4 and 5. The organogram below shows Swala Energy Ltd's presence in East and Southern Africa.
Every country where Swala Energy Ltd has gone, the company opens up possibilities for integrating local people in the local boards as shareholders and directors. In Kenya and Tanzania, the local subsidiary of Swala Energy Ltd is probably already listed on the local stock exchange, or at least in the process of doing so. The company has plans for building capacity in institutions that provide expertise in O&G; and singles out the area of geophysical data processing and management besides training in the science of exploration. I couldn't agree more as my earlier articles have also highlighted this issue. Geophysics is a multi-disciplinary specialisation which is approached from nearly all sciences. People with strong backgrounds in mathematics and computing are best suited for data processing; those from geology or non-computational fields are usually good field workers and analysts. The challenge of studying mathematical sciences is that, one does the hard work - usually sitting in a quiet room alone; and can have serious problems communicating and utilising their acquired knowledge and skills to other people meaningfully. Some can hardly write a page of independent mathematical thinking or other subjects applied to situations in the real world, or speak intelligently to an audience not seeking an academic grade from them. A scientist who cannot communicate between disciplines has no place in the ever-evolving scientific and technological platform.
Swala has recognized this limitation and for her part, the company has already committed to providing scholarships for Tanzanian students wishing to specialise in petroleum geology and engineering at the University of Dar Es Salaam. It may inspire someone to know that Dr. Ridge, the C.E.O. holds a Bsc in Applied Geology, Msc in Mining Geology, PhD Chemical engineering and an LLM. He was Vice-President of the Royal bank of Canada, the first in Global Investment O&G team among other appointments in the sector.
It remains for Zambians to widen the range of university level specialisations apart from school teacher training, to learn to transform tacit (scientific, mathematical, engineering) knowledge into economically valuable stuff. Swala Energy (Zambia) is manned by professionally competent, field-tested Zambians working with their expatriate colleagues. Swala is not alone, there are also outfits by local Zambians which are not just watching from the open wings, but are positioning themselves to help.
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