Invictus’ Cabora Bassa Project: PPSA review completed, finalisation imminent

INVICTUS Energy says a final independent review of the Petroleum Production Sharing Agreement (PPSA) by an external European legal counsel has been completed and is now with the relevant authorities in Zimbabwe.

The firm, Invictus which is an Australian company searching for and developing oil and gas assets in the northern Zimbabwe, commenced exploration drilling in 2022 — spending more than US$80 million to date at its Cabora Bassa Basin in Mbire and Muzarabani districts, Mashonaland Central province.

The Australia-headquartered company last year confirmed natural gas and oil discovery in the prospective area.

Under the PPSA, the State is expected to have a 40 percent share of the hydrocarbons to be extracted in the Cabora Bassa Basin by Invictus whose licence covers Special Grant 4571, 1848, and 1849.

In a latest update, Invictus said finalisation of the PPSA to provide a stable, transparent, equitable legal and fiscal framework to Zimbabwe’s oil and gas sector is now expected in the coming weeks in preparation for execution.

The PPSA review which was facilitated through the Africa Legal Service Facility, marks a significant milestone in the development of Invictus’ exploration and production activities.

“Geo Associates (Pvt) Ltd, Invictus’ 80 percent-owned subsidiary and holder of the Special Grant 4571 containing Mukuyu gas-condensate discovery, has received indication that the PPSA will be finalised for execution in coming weeks.

“The PPSA is designed to ensure fair and equitable sharing of value generated from the Cabora Bassa project between the Government, Invictus and its partners, as well as providing a robust governance framework for future management of the project,” said the Australian company.

Demonstrating the Government’s long-term support for the Cabora Bassa project, in July this year, the Mutapa Investment Fund committed to underwriting US$5 million of a US$10 million capital raise.

Invictus managing director Mr Scott Macmillan said: “Completion of the PPSA review by external independent counsel is a significant milestone for Invictus and underscores the company’s commitment to adhering to international best practices and fostering robust partnerships with host governments.

“Once executed the PPSA represents a key step in ensuring the long-term success of the company’s operations and contributing positively to the development of the region’s energy sector.”

On account that the Southern African Development Community region is presently grappling with energy supply challenges, it is hoped that the Invictus oil and gas project provides a promising opportunity for Zimbabwe to export excess electricity.

Apart from energy self-sufficiency, President Mnangagwa is on record saying other potential benefits from the oil and gas discovery include production of liquefied petroleum gas, fertilizer and petro-chemicals.

Following the successful exploration drilling conducted at Mukuyu-1 and Mukuyu-2 wells in Mbire, Invictus is continuing with further test drilling at its Musuma prospective area in Dande next year.

It is believed that the ongoing investment would yield significant new employment opportunities in the petroleum sector — and overall jobs will be created once extraction commences in primary production, midstream (pipelines and storage) and downstream (gas-to-electricity, gas-to-fuel) industries.

The Mukuyu discoveries from the Lower and Upper Angwa formations of the targeted prospective area ranked as the second-biggest oil/gas discovery in Sub-Saharan Africa in 2023, representing an estimated 230 million barrels of oil equivalent (mboe) or 1,3 trillion cubic feet (Tcf) of gas from just the first two wells drilled in the 200-square-kilometre Mukuyu
structure.

Analysis of downhole samples retrieved to the surface revealed high-quality gas condensate with minimal impurities, ideal for low-cost processing.

Most importantly, hydrocarbon presence and migration were proved in secondary targets and present additional upside I shallower targets.

The Mukuyu discovery considerably derisks future exploration and development of the Cabora Bassa project.

Mr Macmillan said his organisation was proud to be playing a pivotal role in Zimbabwe’s critical oil and gas industry and remains committed to delivering sustainable benefits for all stakeholders, including the communities from which Invictus operates.

“With the PPSA execution imminent, we look forward to progressing our exploration and production efforts and delivering long-term value for our shareholders,” he said.-ebsinessweekl