Canadian Vangold Resources starts oil exploration in Rwanda

Nov 07, 2007 01:00 AM

Rwandans will have to wait for 18 months to know whether their country sits on oil deposits. The development follows an agreement that allows Canadian firm, Vangold Resources, to carry out a hydrocarbon potential evaluation over north western Rwanda.
The company announced that it will conduct a detailed and comprehensive study of the area to identify those areas of greatest prospective interest. The reconnaissance aerial-geophysical survey will be conducted over a period of 18 months by either plane or helicopter. The cost of the surveys is estimated to be $ 1.2 mm.

The area in the Kivu Graben, dubbed the “White Elephant”, is part of the great western East African Rift System. The graben, approximately 90 km wide and 200 km long, trends North-North-East to South-South-West and straddles both Rwanda and the Democratic Republic of Congo.
Structurally, according to the Vancouver-based company, Kivu Graben is the southern extension of the Albertine Graben in Uganda, where there has been major oil discoveries by Tullow Oil and Heritage Oil. Over a period of a year, the company has been doing technical studies of the probable area that has now been narrowed to 1,631 sq km. The “White Elephant” area had previously been curved to 2,708 sq km in area representing 11 % of the land mass of Rwanda.

There still remain loads of questions as to whether Rwanda shares some quantity of the oil find in South Western Uganda bordering Rwanda and DR Congo. Government has kept low on the matter that even President Paul Kagame makes very guarded comments when asked. Kagame has however maintained that it will never be a “curse” like many African countries whose people are in biting poverty despite billions of oil revenue often siphoned off through corruption.
Officials are keen not to raise stakes among the people who would feel oil would come as a dream to solve all the problems hitting the country. In the event that the oil is not found, it would be another issue to explain.

It'slargely because of lack or low levels of minerals in the country that the post-Genocide government chose to invest heavily in human resources with a vision of building a knowledge-based economy. But Vangold Resources says favourable petroleum systems exist supporting the “generation, migration, accumulation and entrapment” of hydrocarbons (oil and other minerals like gas) in the area in question. This means that the company is to a very large extent convinced that there are considerable deposits.
Vangold President and CEO Mr Dal Brynelsen told recently "There are indications of possible development of prospective sedimentary basins in Kivu Graben. However, details in terms of actual basin-fill thicknesses of the individual basins in the graben area and their petroleum potential are unknown. Vangold is committed to and prepared to underwrite this risk for the next 18 months."

High subsidies
The news also comes at a time when oil prices are sky-rocketing by the day on the international market that majority of Rwandans may not be able to afford a litter was it not for government subsidy. Oil products here are subsidized to about 70 %.
Based also on structural similarity, it follows that the paleo-tectonic setting and graben-fill environment established in the Albertine Graben (Ugandan area) may have extended to Kivu Graben (Rwandan side), the company said. Therefore, according to Francis Karanja, Vangold's geologist, "It is reasonable to conclude that the favourable petroleum systems resulting in the generation and entrapment of the hydrocarbons in Albertine Graben may have also existed in Kivu Graben."

The 1-year technical study also apparently shows positive indicators of hydrocarbons generation in Kivu Graben include the existence of methane and other higher molecular aliphatic hydrocarbons deep under Lake Kivu. The higher molecular gases include ethane, propane, iso-butane and traces of n-butane.
Evidences to the existence of Miocene deep lakes and sedimentary basins where oil generating source rocks may have accumulated include the lacustrine sedimentary sequence outcrop of Gisakura Formation at Gisakura place and further the observed sub-lacustrine alteration of the Miocene basalts in Kivu graben, the company said. It added: "Other evidence of the existence of Miocene lakes includes the shore-line deposited volcaniclastics sequences outcropping at Gisakura place. Sedimentary basins development in Kivu Graben includes East Kivu, West Kivu and Burundi's Rusizi basins with a zone of structural culmination (accommodation zone) located between the basins."

The 18-month survey will detect any oil seepage marking the beginning of Vangold's new venture programme to explore for hydrocarbons in the Rwanda concession area. Experts say the hypothesis for oil and gas exploration suggests that whenever there is a leak or seepage in a water body it comes out in the form of bubbles and plumes.
Near to Lake Kivu, Lake Victoria and adjoining areas has shown proven occurrence of petroleum and natural gas in contact zone of Precambrian and Miocene clay, Vangold said. The possibility of oil pool, as the firm explains, can also be confirmed along the contact zone of Precambrian and Miocene clay along the specific locations like Bisesero, Kibuye, Kayove and Nyamyumba and several others -- all to the western region of Rwanda.

The survey-agreement signed by Energy and Communications State Minister Eng. Albert Butare for government grants Vangold “Right of First Option” to negotiate and execute a Contract for the exploration and exploitation of the oil if found. The deal also provides for dispute resolution by way of a “Conciliation Committee” which shall consist of three members -- meaning should be any misunderstanding over obligations, no courts will be involved.
Government and Vangold will appoint a member to the Committee with the third appointed by the nominated members.

Butare confirms
Meanwhile, Eng. Butare confirmed that Vangold Resources would immediately start the exploration exercise.
"They had come here before, but now they have returned saying they are prepared for the job. They said they have helicopters and other necessary equipments," he said.
Asked when the firm would start the search, Butare said: "Now. They are ready."

In a related development, the State Minister for Mines and Water, Prof. Bikoro Munyanganizi told, that an American company Loge Mining has requested to start the phase of exploring the quantity of gold deposits in Gicumbi District, Northern Province. The firm, which has been involved in exploring gold in northern Rwanda for about two years now, is working with some Russian experts.
Bikoro said that the company submitted a brief report on its preliminary findings to the government, and is expected to submit a detailed one before the end of the year.

"Many companies have come and, after studies, confirmed existence of gold deposits in some parts of Rwanda, but none of them had undertaken to ascertain just how deep those quantities are.”
“That is what Loge Mining will do soon," he said.

Source: The New Times
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