Invictus Energy is on the verge of securing a crucial production agreement with the Zimbabwe government for its Cabora Bassa project, promising to unlock the potential of one of sub-Saharan Africa’s largest gas discoveries. This development comes after years of anticipation and could mark a significant turn for Zimbabwe’s energy sector.
The Australian company has been in talks with Zimbabwe to finalize a production sharing agreement (PSA) that would pave the way for developing the vast gas reserves found in the north of the country. The discovery at Mukuyu is second only to Shell’s find off the coast of Namibia, according to energy consultancy Wood Mackenzie, highlighting its significance on the African continent.
Robin Sutherland, a non-executive director at Invictus and industry expert, shared insights into the negotiation process. A team from Invictus met with senior Zimbabwean officials last week, a meeting that included the central bank governor, John Mangudya. Mangudya expressed a keen interest in accelerating the discussions, aiming to wrap up the negotiations within weeks rather than the months or years that such agreements typically take.
The PSA has been in limbo for about four years but is now seen as the final hurdle for Invictus to commercialize its gas discoveries. The energy sector in Zimbabwe, which is currently facing power shortages, is eagerly awaiting the project’s advancement. Miners and other potential off-takers are closely watching as Invictus plans to move towards commercialization.
In preparation for this, Invictus has already taken significant steps. The company plans to conduct 3D surveys and test the Mukuyu-2 well to assess its productivity. Furthermore, it has secured a gas sales agreement with Mbuyu Energy, aiming to support a 500-megawatt gas-to-power project. This venture could alleviate some of Zimbabwe’s energy challenges, with Sutherland noting the high demand for power in the region and the project’s proximity to the national grid.
Sutherland hinted at the possibility of setting up a small gas processing facility that could be connected to a generator to produce power, suggesting that the initial phases of the project’s commercialization could begin within the next couple of years. However, details remain to be finalized.
This move by Invictus Energy represents a significant step forward in Zimbabwe’s efforts to harness its natural resources for energy production. With substantial gas reserves waiting to be developed, the agreement with the Zimbabwe government could transform the country’s energy sector, offering a more stable and sustainable power supply.
