Business

Added impetus for major oil, gas project

Golden Sibanda

Invictus Energy, the Australian firm exploring for oil and gas in Muzarabani, says the petroleum exploration development and production agreement (PEDPA) it signed with Government on March 26 accords special economic zone (SEZ) status to the key energy project.

It means the company will enjoy fiscal and non-fiscal incentives such as a tax holiday and lower corporate tax at a latter period.

President Mnangagwa, who was guest of honour at the signing ceremony, believes the PEDPA shows major strides in “our efforts to tap into our oil and gas deposits, which is a new territory in the country’s mining sector”.

If the oil and gas deposits prove to be commercially viable, the country will benefit from the production of electricity, liquid petroleum gas (LPG), fertiliser and petro-chemicals.

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It will also make the country energy secure.

For the past four years, Government has been opening up the economy for investment through simplifying the ease of doing business and engaging and re-engaging with the international community.

The PEDPA provides the framework that guides Invictus Energy’s Cabora Bassa oil and gas project.

It covers all the phases — exploration, appraisal, development and production.

The agreement also provides obligations and rights of each party, the minimum work programme obligations to maintain the licence in good standing, and the security of tenure for the project duration.

Further, it provides the licence holder the right to enter into a 25-year production licence following the exploration periods.

The company is currently in the second exploration period.

“The PEDPA also provides for special economic zone (SEZ) status for the Cabora Bassa Project, which will facilitate a host of fiscal and non-fiscal incentives over the life of the project, including legal and fiscal stability, offshore banking, zero capital gains tax, tax holiday periods and 15 percent corporate rate thereafter,” Invictus Energy said a statement last week.

Vice President Dr Constantino Chiwenga said “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.”

The investment is a culmination of the early engagement by the Second Republic with the investor, according to Mines and Mining Development Minister Winston Chitando.

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“Should these (oil and gas test) wells be successful, as we hope, Zimbabwe will, by this time next year, be a producer of oil.”

Invictus managing director Mr Scott MacMillan said they were extremely pleased to have executed the PEDPA following extensive negotiation and collaboration with various Government ministries, bodies and the Zimbabwe Investment and Development Authority (ZIDA).

“We are grateful for the collaborative and constructive efforts by the Government to put the PEDPA in place, which provides a robust framework to facilitate long-term investment into the oil and gas sector with confidence,” Mr MacMillan said.

Invictus believes the project has gained traction owing to the conducive investment environment and reforms undertaken by the new political administration.

“The Government should be commended for putting in place a robust investment framework to govern the oil and gas sector and demonstrates that ‘Zimbabwe is Open for Business’,” said Invictus chair Mr Joe Mtizwa.

French oil giant Mobil previously explored the area stretching from Victoria Falls to the eastern border with Mozambique in the early 1990s.

SUNDAYMAIL