Invictus Energy hopes to finalise production agreement with Zimbabwe within weeks

Invictus Energy

07/03/2024 13:06

CAPE TOWN, March 7 (Reuters) - Australia's Invictus
Energy  IVZ.AX  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.

 (Reporting by Wendell Roelf in Cape Town and Nyasha Chingono in
Harare; editing by Bhargav Acharya, Alexandra Hudson)
 ((wendell.roelf@thomsonreuters.com; +27 21 461 3523;))