INVICTUS Energy, the Australia Stock Exchange (ASX) listed company exploring for oil and gas in Zimbabwe, has commended the Government for creating a conducive environment that promotes investment.
This comes after the company received a non-binding offer for farm-in to the Cabora Bassa (Muzarabani) oil and gas Project and had approvals for gas exploration, development and production endorsed.
The proposed farm-in offer is subject to completion of further technical, legal and commercial due diligence by both parties, approvals and agreements by relevant Government authorities and execution of binding Farm Out Agreement(s).
Invictus Energy and its partners are also working on a Petroleum Product Sharing Agreement (PPSA), which contains the fiscal provisions of the project, including the Government’s profit/product share, which 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.
Invictus also said the Petroleum Exploration Development and Production Agreement (PEDPA) between Geo Associates, its parent shareholder, and the Government was reviewed by the inter-ministerial committee put in place 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 lifecycle. The company is awaiting final approval of the (PEDPA) agreement prior to execution.
“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,” said Invictus managing director Scott McMillan.
Together, the PEDPA and PPSA form the Production Sharing Agreements (PSA) between the Government of Zimbabwe and Geo Associates and demonstrates the Zimbabwe Government’s commitments 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,” Invictus said.
Invictus said following the completion of the field reconnaissance programme and the receipt of submissions from multiple vendors, the company had selected its preferred contractor to undertake a seismic (geophysical study) acquisition campaign in 2021.