Chronicle Editor
Business Reporter
INVICTUS Energy says a Petroleum Exploration Development and Production Agreement (PEDPA) review of its oil and gas Cabora Bassa project in Muzarabani has been completed.
Last month, Invictus Energy, which is exploring for oil and gas in Muzarabani in Mashonaland Central province, announced the commencement of field operations in preparation for drilling of two test wells next year.
In a statement, the investor said the PEDPA has since been recommended for approval by regulatory authorities.
“The PEDPA between Geo Associates and the Republic of Zimbabwe was reviewed by the Inter-Ministerial Committee established to review the agreement and has been recommended for approval.
“The PEDPA provides the framework for progression of the Cabora Bassa Project through the exploration, appraisal, development and production phases and the obligations and rights of each party over the project life cycle,” it said.
Invictus said it was now waiting for final approval of the agreement prior to execution. In September, the investor also announced that the drafts of the Production Sharing Agreements had been finalised and were undergoing review by members of an Inter-Ministerial Committee advised by an independent expert.
“The Petroleum Product Sharing Agreement (PPSA) contains the fiscal provisions of the project, including the Republic of Zimbabwe’s profit/product share, and takes effect following the commencement of the production phase of the project.
“The PPSA is undergoing independent review, which is expected to be completed early in the new year following which the PPSA is expected to be finalised and executed,” said Invictus Energy.
Together, it said the PEDPA and PPSA form the Production Sharing Agreements (PSA) between the Republic of Zimbabwe and Geo Associates demonstrates the Government’s commitment to implementing investor-friendly reforms and promoting and protecting foreign investment.
The PSA will ensure that a predictable, stable and transparent legal and fiscal regime is put in place that is commensurate with terms in the region, follows international best industry practice, meets the country’s aspirations and provides investors and the country with a fair share of any developed resources.
Recently, the investor completed a field reconnaissance programme in Muzarabani district and submissions from multiple vendors have been received to allow the firm to select preferred contractor to undertake a seismic acquisition campaign in 2021.
“The company will commence detailed planning post formal contract award to enable the acquisition campaign to commence following the conclusion of the rainy season,” said the company.
Invictus has made extensive progress reinterpreting data collected by Mobil in the mid-90s and the results of independent studies have confirmed huge potential for the existence of oil and gas in Muzarabani.
The reconnaissance programme and baseline survey consisted of the traversing of the proposed infill seismic lines for a planned acquisition campaign in the 2021 dry season.
The programme captured details such as topography, existing access roads, drainage, vegetation cover, soil types, rock exposures, sampling of any natural oil and gas seeps, and areas of development (constructions and cultivation).
Invictus said it has also received a non-binding offer for farm-in to the Cabora Bassa Project. It said the proposed transaction is subject to completion of further technical, legal and commercial due diligence by both parties, approvals and agreements by requisite Government authorities and execution of a binding farm-out agreement (FOA).
“Further details of the proposed transaction will be made public upon completion of a binding FOA and satisfaction (or waiver) of conditions,” said the exploration firm.
Invictus Energy managing director Mr Scott Macmillan was quoted as saying: “It is pleasing to have concluded the approval for the PEDPA with the Republic of Zimbabwe and to have received a farm-in offer for our Cabora Bassa project, which sets the company on a positive path for a transformational 2021.
“Our progress of concluding the Production Sharing Agreements and the Farm-Out process has been severely impacted by the pandemic restrictions, which have been in place for most of the year, coupled with an extremely challenging oil industry environment.”
However, he said on the back half of the year as the oil price environment improved and in-country approvals such as the renewal of their licence for a second exploration period, Environmental Impact Assessment approval and progress on the PSA being made, interest in the project has gained momentum from multiple parties.
“The company is working to complete the various agreements as soon as possible in order to conclude a transaction, commence the seismic acquisition and basin opening high impact drilling campaign,” said Mr Macmillan.
Online Reporter