Invictus Energy hopes to finalise production agreement with Zimbabwe within weeks

Invictus Energy hopes to finalise production agreement with Zimbabwe within weeks

By Reuters

Australia’s Invictus Energy is hopeful it will “within weeks” conclude a production sharing agreement (PSA) with the Zimbabwe government to develop its Cabora Bassa project, a non-executive director said on Thursday, following years of delays.

The PSA is an important missing element as Invictus seeks to commercialize¬†gas discoveries¬†in the north of Zimbabwe, with energy consultancy Wood Mackenzie estimating that Mukuyu was the second largest discovery made in sub-Saharan Africa last year behind Shell’s Jonker-1 find offshore Namibia.

Robin Sutherland, an industry veteran and non-executive director at Invictus, said a team met with senior government officials last week where the Zimbabwe central bank governor John Mangudya indicated he would lead government negotiations.

“He wants to fast-track the negotiations to get them done and mentioned weeks rather than months or years,” Sutherland, who travelled with the team, told Reuters.

Mangudya and his office did not immediately respond to requests for comment.

The PSA has been held up for around four years and is key as Invictus looks at early stages to commercialise the discovery, with miners in the energy-starved country among potential off-takers, he said.

Invictus Energy, which will undertake 3D surveys and test the Mukuyu-2 well to determine its flow rate, has already signed a gas sales pact with Mbuyu Energy for a 500 megawatt (MW) gas-to-power project.

“We have customers begging for power and we are close to the grid,” Sutherland said of possible plans to get a small gas processing facility in and hook it up to a generator for power.

The first steps to commercialise its Zimbabwe project might be taken in the next year or two, he added, although nothing had been finalised yet.