Invictus continues to progress its Cabora Bassa gas project in Zimbabwe with the company now receiving a non-binding farm-in offer.
While details of the offer will only be released after the signing of a binding agreement and satisfaction of conditions, it underlines the work that the company has carried out to better understand the project and its potential to host multi-trillion cubic feet of gas.
Gas that could potentially alleviate the energy shortages that are hampering industry and economic growth in South Africa.
Invictus Energy added that the Inter-Ministerial Committee has reviewed the Petroleum Exploration Development and Production Agreement (PEDPA) and has recommended that it be approved.
The PEDPA provides the framework for the company to progress the project through the exploration, appraisal, development and production phases and the obligations and rights of each party over the project lifecycle.
Additionally, the Petroleum Product Sharing Agreement (PPSA) that contains the fiscal provisions of the project – including Zimbabwe’s profit/product share – is currently undergoing independent review that should be completed early in 2021.
These agreements, which form the production sharing agreements between Zimbabwe and the company, will ensure that a predictable, stable and transparent legal and fiscal regime is in place.
“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,” managing director Scott Macmillan said.
He added that while progress had been impacted this year by COVID-19 pandemic restrictions, the improved oil price environment in the second half along with progress on approvals has increased interest in the project as an attractive, low cost and high potential asset 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,” Macmillan added.
Invictus has selected the preferred contractor to undertake a seismic acquisition campaign in 2021.
It plans to acquire a minimum of 400 line km of 2D seismic which exceeds the work program obligations for the current exploration period.
The seismic, which will be the first in Zimbabwe for 30 years, is expected to begin once the rainy season has concluded.
This will be followed by a high-impact drilling program to test the petroleum potential of the Basin.
This article was developed in collaboration with Invictus Energy, a Stockhead advertiser at the time of publishing.