BY TINASHE KAIRIZA
ZIMBABWE’S ambitions to produce oil and gas along the Zambezi basin in Muzarabani is taking shape with Australian Stock Exchange (ASE)-listed firm Invictus Energy set to commence a seismic programme in the “next few weeks”, the Zimbabwe Independent can report.
This comes after Invictus Energy and the government signed a Petroleum Exploration Development and Production Agreement (PEDPA). Under the PEDPA, Invictus Energy was granted rights to undertake production for the next 25 years and the project was granted a Special Economic Zone (Sez) status.
Deliberations are already underway to finalise the Petroleum Production Sharing Agreement (PPSA). The PPSA will, among other salient matters, spell out the sharing ratios that will accrue to Invictus, the government and other stakeholders on oil output and profits. Invictus Energy chief executive Scott McMillan said preparatory work to roll out exploration drilling was underway.
“We are excited to commence our seismic programme very soon. The equipment is being mobilised and will be in the country in the next few weeks. Once the equipment arrives, we will train about 85 local personnel,” McMillan said.
“We are pleased that both the seismic and the drilling programme will involve a local content component in terms of personnel and services. The seismic programme will gather more geophysical data which assists us in seeing beneath the surface.”
The firm has so far injected US$4 million into the preliminary stages of the project whose commercial viability is projected to transform Zimbabwe into an oil producing country.
He said: “The findings from our exploration process so far have determined that all the ingredients required for a working petroleum system are present within the Cahora Bassa Basin.
“We do see some encouraging signs on the seismic data, but the only way to prove the presence of hydrocarbons is through drilling.
“The interest of the local community will be determined through the Petroleum Product Sharing Agreement that is currently being finalised with the government of Zimbabwe.
“This agreement details what will accrue to the Zimbabwean community. We will also continue implementing our corporate social responsibility activities.”
In the long term, the firm also intends to list on the Victoria Falls Stock Exchange (VFEX). The bourse was established in October 2020, to lure Foreign Direct Investment (FDI).
“We have the option of bringing in a partner in the short term to participate in the drilling and then if successful, then in the development phase,” McMillan said.
“This is typical at this stage of the project where the risk is the highest and it is not unusual to see three or five partners in a project, particularly for a frontier basin where no wells have been drilled before.”
Invictus Energy intends to sink two wells in Muzarabani at a cost of US$20 million by September, which will be a key milestone to determine whether Zimbabwe can set up viable oil production operations.