Invictus Energy, the company prospecting for gas and oil in Zimbabwe, has moved a few steps closer in the long road towards testing for petroleum potential in the Cabora Bassa basin; a new farm-in agreement, picking a contractor to run key seismic tests, and preparing a production agreement with government.
Invictus owns 80% of the Zimbabwe operation. Under a farm-in agreement, a new investor would come on board to help the company bring its claim to production.
“The proposed transaction is subject to completion of further technical, legal and commercial due diligence by both parties, approvals and agreements by requisite government authorities and execution of binding Farm Out Agreement(s). Further details of the proposed transaction will be made public upon completion of a binding FOA(s) and satisfaction (or waiver) of conditions,” Invictus says in its latest update.
Invictus has also jumped one more regulatory hurdle, with a successful review of the Petroleum Exploration Development and Production Agreement (PEDPA) between the company and government.
Because this is the first oil and gas project, Zimbabwe had previously no laws or regulations on how the sector would work. The agreement sets regulations that will govern both Invictus and government trough the exploration, appraisal, development and production phases and the obligations and rights of each party over the project lifecycle.
A separate product sharing agreement, which will determine who gets what should the project find a resource and goes into production, is also still in discussion.
Before it can start drilling, Invictus will do a seismic acquisition exercise, one of the first steps towards identifying and confirming where any gas or oil resources are. A company has now been selected to do this work, Invictus says.
“Following the completion of the field reconnaissance program and following receipt of submissions from multiple vendors, the Company has selected it preferred contractor to undertake a seismic acquisition campaign in 2021. The company will commence detailed planning post formal contract award to enable the acquisition campaign to commence following the conclusion of the rainy season,” Invictus says.
This would be the first such program in the country for 30 years and it is expected to start once the rainy season is over. The company is targeting a minimum of 400 line km of 2D seismic which exceeds the work program obligations for the current exploration period.
Once this step is done, Invictus will then start a drilling campaign, the step that is needed to test the petroleum potential.
Last year, the Environmental Management Authority authorised Invictus’ Environmental Management Plan, allowing the company to do an on-the-ground field reconnaissance program in the Cabora Basa Basin. This, the company reports, was completed during the last quarter and ahead of schedule.