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Invictus signs production-sharing deal with Zimbabwe govt
2 hrs ago |
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AUSTRALIAN-listed energy firm Invictus Energy Limited has signed a Petroleum Production Sharing Agreement (PPSA) with the Zimbabwean Government, paving the way for the commercial development of the long-awaited Cabora Bassa gas project in Muzarabani.
The agreement, concluded through Invictus' subsidiary Geo Associates, establishes the legal and fiscal framework for petroleum exploration, production and revenue sharing at the site in Mashonaland Central province.
It sets out how oil and gas resources will be developed and how future profits will be distributed once commercial production begins.
Invictus managing director Scott Macmillan said the agreement adopts a hybrid fiscal model that allows government to receive its share either in cash or in physical petroleum products.
"In general terms, it is a hybrid agreement," said Macmillan. "In addition to the concession arrangement consisting of royalty and corporate tax, there is also a fiscal arrangement on top where government may elect to take a portion of the profits or take it as product."
He added that the revenue structure is based on a sliding scale that adjusts according to project profitability.
"In times of low returns, the contractor gets a higher share. In times of higher returns, government gets a much bigger share," he said.
The company has already accelerated exploration activities following its December 2023 gas discovery and an estimated 184 million barrels of oil identified in preliminary assessments in September last year.
Invictus is preparing to drill the Musuma-1 well in the second half of the year, which is estimated to hold around 1.2 trillion cubic feet of gas and 73 million barrels of condensate.
Government officials described the project as a major milestone in Zimbabwe's push to improve energy security and reduce dependence on imported fuels.
Finance Minister Professor Mthuli Ncube said the deal demonstrates Zimbabwe's commitment to internationally aligned investment frameworks.
"The signing of this agreement sends a strong signal to the international community that Zimbabwe is serious about developing this energy sector through modern, commercially viable and internationally aligned frameworks," he said.
Energy and Power Development Minister July Moyo said domestic gas production would help diversify the country's energy mix and support industrial development.
"Domestic gas development represents a significant opportunity to diversify Zimbabwe's energy mix, reduce reliance on imported fuels, and underpin future power generation and industrial initiatives," he said.
The project will initially include a pilot gas-to-power phase supplying electricity to Dallaglio Investments' Eureka Gold Mine.
Zimbabwe remains heavily dependent on imported energy, with authorities viewing domestic gas production as a potential long-term solution to power shortages and industrial constraints.
The agreement, concluded through Invictus' subsidiary Geo Associates, establishes the legal and fiscal framework for petroleum exploration, production and revenue sharing at the site in Mashonaland Central province.
It sets out how oil and gas resources will be developed and how future profits will be distributed once commercial production begins.
Invictus managing director Scott Macmillan said the agreement adopts a hybrid fiscal model that allows government to receive its share either in cash or in physical petroleum products.
"In general terms, it is a hybrid agreement," said Macmillan. "In addition to the concession arrangement consisting of royalty and corporate tax, there is also a fiscal arrangement on top where government may elect to take a portion of the profits or take it as product."
He added that the revenue structure is based on a sliding scale that adjusts according to project profitability.
"In times of low returns, the contractor gets a higher share. In times of higher returns, government gets a much bigger share," he said.
The company has already accelerated exploration activities following its December 2023 gas discovery and an estimated 184 million barrels of oil identified in preliminary assessments in September last year.
Invictus is preparing to drill the Musuma-1 well in the second half of the year, which is estimated to hold around 1.2 trillion cubic feet of gas and 73 million barrels of condensate.
Government officials described the project as a major milestone in Zimbabwe's push to improve energy security and reduce dependence on imported fuels.
Finance Minister Professor Mthuli Ncube said the deal demonstrates Zimbabwe's commitment to internationally aligned investment frameworks.
"The signing of this agreement sends a strong signal to the international community that Zimbabwe is serious about developing this energy sector through modern, commercially viable and internationally aligned frameworks," he said.
Energy and Power Development Minister July Moyo said domestic gas production would help diversify the country's energy mix and support industrial development.
"Domestic gas development represents a significant opportunity to diversify Zimbabwe's energy mix, reduce reliance on imported fuels, and underpin future power generation and industrial initiatives," he said.
The project will initially include a pilot gas-to-power phase supplying electricity to Dallaglio Investments' Eureka Gold Mine.
Zimbabwe remains heavily dependent on imported energy, with authorities viewing domestic gas production as a potential long-term solution to power shortages and industrial constraints.
Source - newsday
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