29 March 2021 – In what could possibly be a gamechanger for Zimbabwe, the country’s government has given the green light for a gas project in the north-east of the country to go ahead.
Australian listed Invictus Energy’s subsidiary in Zimbabwe, Geo Associates, signed a Petroleum Exploration Development and Production Agreement (PEDPA) with the government of Zimbabwe on Friday, the 26th of March.
ASX listed Invictus Energy owns 80% of Geo Associates. The agreement was signed on behalf of the Zimbabwe government by the Minister for Mines and Mining Development, Winston Chitando, at a signing ceremony at State House in Harare.
The PEDPA provides the framework for progression of the Cabora Bassa Project through the exploration, appraisal, development and production phases, the obligations and rights of each party, the minimum work program obligations to maintain the licence in good standing, and the security of tenure for the project duration.
Through the agreement Invictus, through its subsidiary Geo Associates, will be able to enter a 25-year production licence following the exploration periods. The company is currently in the second exploration phase.
The PEDPA also provides for Special Economic Zone (SEZ) status for the Cabora Bassa Project which will facilitate a host of fiscal and non-fiscal incentives over the life of the project including legal and fiscal stability, offshore banking, zero capital gains tax, tax holiday periods and 15% corporate rate thereafter.
The president of Zimbabwe, Emmerson Mnangagwa, was the guest of honour at the signing ceremony. Mnangagwa said that the signing of the (PEDPA) agreement represents major strides in Zimbabwe’s efforts to tap into the country’s oil and gas deposits, which is a new territory in the country’s mining sector.
“The benefits of an oil and gas discovery includes electricity generation, production of liquid petroleum, liquefied petroleum gas (LPG), fertiliser production and petrochemicals,” said Mnangagwa.
Mnangagwa added that the signing of the PEDPA with Geo-Associates, was testimony to the government’s commitment to open the economy to investment as well as to engage and reengage the global community to do business in Zimbabwe.
Vice President Constantino Chiwenga said that the exploration and development of oil and gas resources is a game-changer in making the Zimbabwe energy sector self-sufficient, which is key in realising the country’s national vision.
“One of the early engagements we had was to engage with Geo-Associates and Invictus to work together to ensure that we work on the development programme of this asset. Should these oil and gas test wells be successful, as we hope, Zimbabwe will, by this time next year, be a producer of oil,” said Chitando.
According to Invictus Managing Director, Scott Macmillan, the PEDPA provides a robust framework to facilitate long term investment into the oil and gas sector with confidence. “This is a significant milestone for the project which provides the security of tenure and the confidence for the significant future investment ahead. The PEDPA and the provision for the creation of a Special Economic Zone for the project lays out the pathway for rapid development of the project on exploration success,” said Macmillan.
According to Joe Mutizwa, Non-Executive Director of Invictus’ local subsidiary and Chairman of Mangwana Capital, a shareholder of Invictus, representing the company at the signing ceremony, the significant investment committed by Invictus in the oil and exploration program has been made possible by the conducive investment environment and significant reforms put in place by the government of Zimbabwe.
“The government should be commended for putting in place a robust investment framework to govern the oil and gas sector and demonstrates that ‘Zimbabwe is Open for Business’. We are extremely pleased and extremely grateful to have the local communities in the Muzarabani and Mbire Districts and Mashonaland Central Province express their full support for the project. We look forward to working closely with and in the community during our exploration program and beyond. Invictus is also proud to have a significant local indigenous investor in Mangwana Capital which I chair. Mangwana Capital represents over 21 pension funds in the country we are proud to be supporting Invictus in this important project. This project is a potential game changer for the country and if successful will change the energy landscape and place Zimbabwe on a path to an energy independent future,” said Mutizwa.
Invictus Energy is an independent oil and gas exploration company focused on high impact energy resources in sub-Saharan Africa. The company’s asset portfolio consists of a highly prospective 250 000 acres within the Cabora Bassa Basin in Zimbabwe. The license area includes the world class Mzarabani and Msasa conventional gas-condensate prospects.
The Mzarabani prospect is a multi-TCF and liquids rich conventional gascondensate target, which is potentially the largest, undrilled seismically defined structure onshore Africa. The prospect is defined by a robust dataset acquired by Mobil in the early 1990s that includes seismic, gravity, aeromagnetic and geochemical data.