Golden Sibanda
THE Government has gazetted the Petroleum Production Sharing Agreement (PPSA), which establishes the long-term fiscal, legal and commercial framework governing the exploration, appraisal, development and production of petroleum from the Cabora Bassa Project, in northern Zimbabwe.
This completes the formal execution requirements for the PPSA between Zimbabwe, Australia Stock Exchange-listed Invictus Energy as the operator and its subsidiary Geo Associates as the licence holder.
The PPSA framework provides a conducive environment for partners and financiers supporting the investment required to advance the Mukuyu gas-condensate discovery and unlock the broader Cabora Bassa resource base.
It is a vital, formal contract required by both Invictus Energy and the Government of Zimbabwe to establish the long-term legal, fiscal and commercial framework necessary to transition the pioneering Cabora Bassa project from exploration into commercial production.
Since oil and gas projects require hundreds of millions of dollars in capital (Invictus has already spent over US$100 million), the PPSA includes legal provisions that safeguard the company against any changes to laws or tax structures, protecting its long-term investment.
Large-scale energy development requires institutional backing and farm-out (development) partners.
Reaching the gazettal milestone gives prospective strategic and financing partners the regulatory and fiduciary certainty needed to commit heavy funding to advance the Mukuyu gas-condensate discovery.
Following the Mukuyu wildcat wells, Invictus confirmed a working petroleum system and estimated a portfolio-wide resource base of approximately 4,2 trillion cubic feet (Tcf) of gas and 264 million barrels of condensate on a gross mean unrisked basis (with broader basin estimates going higher).
Invictus is on course to commence exploration drilling at its Musuma-1 prospect, a distinct exploration target within the Cabora Bassa Basin, which targets an estimated 1,2 Tcf of gas and 73 million barrels of condensate.
Following the exploration discovery at Mukuyu-1 and 2 sites, Invictus is now undertaking appraisal of the discoveries, which is the subsequent phase to measure the size of the resource, commercial viability, and total reserves.
