GOVERNMENT is excited by the encouraging prospects of potential discovery of oil and gas in the Muzarabani area, as this will make the country energy self-sufficient, create employment, grow the economy and bring huge downstream benefits, President Mnangagwa has said.
He also said Zimbabwe’s oil and gas industry represented huge, unique and competitive investment opportunities given the significant potential for value chain linkages.
President Mnangagwa said just “the prospect of oil discovery is exciting”, which will inevitably positively impact local communities and the national economy at large.
“The project will undoubtedly impact the GDP of Mashonaland Central Province as well as Muzarabani and surrounding districts,” he said.
The President, who was the guest of honour, was speaking during the signing of the petroleum exploration development and production agreement (PEDPA) between the Government and Australian oil and gas exploration firm, Invictus Energy at State House yesterday.
The PEDPA provides the framework for accelerated development of the Muzarabani oil and gas initiative while also detailing roles and obligations of each party throughout the project lifecycle.
“The signing of the (PEDPA) agreement represents major strides in our efforts to tap into our oil and gas deposits, which is a new territory in the country’s mining sector.
“The untapped oil and gas deposits present huge, unique and competitive investment opportunities, given that the industry has various potential downstream linkages,” said the President.
Apart from the potential for energy self-sufficiency, President Mnangagwa said other potential benefits of the oil and gas discovery included electricity generation, production of liquid petroleum, liquefied petroleum gas (LPG), fertiliser production and petro-chemicals.
President Mnangagwa said the signing of the PEDPA with Geo-Associates, Invictus’ major shareholder, was testimony to the Government’s commitment to open up the economy to investment as well as engage and reengage the global community to do business in Zimbabwe.
“This event shows the positive and tangible strides that my administration is making with regards to the ease and cost of doing business reforms.
“Zimbabwe is indeed open for business and investors are welcome to explore opportunities in other sectors of our economy, such as agriculture, manufacturing, energy and tourism, among others,” he said.
President Mnangagwa said the signing of the agreement with Geo-Associates must not be an end in itself, but should be a means to achieve mutual benefits and outcomes. He urging local partners to maintain targets set under the National Development Strategy 1 (NDS1).
Geo-Associates owns the controlling stake in Invictus Energy, the Australia Stock Exchange-listed company that has made significant progress in exploring for oil and gas in Muzarabani.
The company says it will sink between US$15 million and US$30 million towards drilling of two oil and gas test wells in Muzarabani by October.
President Mnangagwa said the signing of the PEDPA, which provides the framework for rapid progression of the Muzarabani oil and gas project, would give further impetus to the accelerated attainment of the Government’s US$12 billion mining industry target by 2023.
“I exhort all stakeholders to position themselves for the value chain benefits, new investments and technologies that will accrue from the exploration of oil and gas in our country,” he said.
However, he implored Invictus to protect the environment in its operations.
Vice President Constantino Chiwenga said the signing of the PEDPA demonstrated that some companies in the international business community had recognised that Zimbabwe was open for business, as enunciated by President Mnangagwa.
“The signing of this agreement will help ensure that the mining sector continues to contribute to the economic development of the country, with the oil and gas sub-sector expected to contribute immensely towards the country’s vision of achieving an empowered and prosperous upper middle class society by 2030,” he said.
“This signing ceremony is testimony of the New Dispensation’s commitment to transforming the livelihoods of Zimbabweans. The mining sector is one of the building blocks upon which Vision 2030 is premised.
“As we implement the National Development Strategy 1, we welcome such partnerships, not only in the mining sub-sector, but across all sectors of the economy. The exploration and development of oil and gas resources is a game-changer in making the Zimbabwe energy sector self-sufficient which is key in realising our national vision.”
VP Chiwenga said Government continues to prioritise increased production and productivity across all sectors of the economy.
Mines and Mining Development Minister Winston Chitando said Zimbabwe might be a producer of oil by March next year in the event of successful discovery.
Reprocessed Data gathered by global oil giant, Mobil in the early 1990s, has shown encouraging evidence of the potential existence of oil and gas in Muzarabani.
He said his ministry was making efforts to fulfil the target set by President Mnangagwa’s new administration upon inception in 2017, to make Zimbabwe energy self-sufficient.
Added Minister Chitando: “The area in question is 100 000 hectares of land and one of the early engagements we had, as the Second Republic was to engage with Geo-Associates and Invictus to work together to ensure that we work on the development programme of this asset.
“Should these (oil/gas test) wells be successful, as we hope, Zimbabwe will, by this time next year, be a producer of oil.”