By ZBC Reporter
THE MUZARABANI Oil and Gas project has received a major boost after the intervention of the Office of the President and Cabinet (OPC) to expedite its implementation.
The project has been included in the government’s rapid results initiative through the Office of the President and Cabinet, with a move towards establishing a production sharing agreement once drilling begins.
The project is a joint venture between Invictus Energy of Australia which owns 80 percent and a local partner called One Gas Energy.
One Gas Energy Executive Director Mr Patrick Chimbodza confirmed to ZBC News that the project has received the attention of the OPC.
“We have submitted our bids to the OPC so that our project status gets priority in terms of the sticking fiscal and legislative issues,” he said.
Invictus Energy is an independent oil and gas exploration company focused on high impact energy resources in sub-Saharan Africa. The junior exploration company is listed on the Australia Stock Exchange (ASX).
Executive Director Paul Chimbodza, told The Herald Finance & Business that the arrangement will result in closer co-operation between Invictus Energy and the Government in formulating legislative framework for sustainable exploration of gas and oil, not only for Muzarabani project in the Cahora Bassa basin, but for Zimbabwe.
As such, the co-operation will yield a number of key deliverables that include a legal framework, Special Economic Zone status, Production Sharing Agreement (PSA) with Government as well as area extension of the firm’s special grant (SG) 4571. A PSA will entitle Government to a share of gas or oil without it investing money.
“First and foremost the current legislation that is there in Zimbabwe has not been adequate; this is from a Mines and Minerals Act and other legislations like the Petroleum Act (perspective), to cater for oil and gas exploration because this has never been done in Zimbabwe.
“So there are legislative issues not only for our project, but for future projects as well. For example; we have the gold policy; the diamond policy and one would then ask ‘What is your oil and gas policy?’ It has been non-existent.
“There also are issues to do with the tenure of the special grant to align it with what Government is doing. For example, the (oil and gas) production sharing agreement that we are discussing with Government. There has not been legislation that allows the (mines) minister to enter a PSA,” he said.
Mr Chimbodza said there were essentially four key issues or deliverables that would receive closer attention from Government and Invictus Energy for resolution during the course of the 100-day cycle programme.
He added that they are ready to sink a four-kilometre exploratory well in the third quarter of the year once legislative issues are sorted out.
“Results show that at least 215 million barrels of oil reserves are trapped underground but we need to start drilling later this year to establish commercially viable exploration levels,” said Chimbodza.
The project is poised to be a game-changer in the country’s energy and industrial sectors.
“The company’s Cahora Bassa project has been classified as one of the key projects within Zimbabwe that can provide a significant benefit to the economy in pursuit of the vision of becoming a Middle-Income Economy by 2030,’’ Invictus said in a statement released on the ASX where the firm is listed.
A Memorandum of Agreement has been signed with Tatanga Energy to supply gas to power a 500-mega watt power station and another one with Sable Chemicals to supply gas for its electrolysis plant, thereby reducing the importation of ammonia.
By ZBC Reporter