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Ishemunyoro Chingwere Business Reporter

Australia Stock Exchange (ASX) listed Invictus Energy has made major strides towards the signing of a Production Sharing Agreement (PSA) with Government as it prepares to go on the ground and sink a test well at its gas and oil prospect in Muzarabani.

The miner is currently working on drilling the first 3,5km to 4km test well at the oil prospect, which will cost between US$15 million and US$20 million.

However, drilling work has to be preceded by a PSA as the oil industry operates on such agreements.

In March, Government set up a technical committee for the PSA which was chaired by Permanent Secretary in the Ministry of Finance and Economic Development.

Other officials in the committee included his counterpart from the Ministry of Mines and Mining Development as well as officers from the Office of the President and Cabinet, the Reserve Bank of Zimbabwe (RBZ) among others.

In an interview with the national broadcaster — ZBC-TV, Mines and Mining Development Minister Winston Chitando said negotiations were progressing well and a deal is close.

“.  . .  the production sharing agreement has to be signed and that’s now quite advanced in terms of negotiations,” said .

“Once the production sharing agreement is concluded and signed, on the basis of that (signing) Invictus will now be able to then sink in money (into the project),” he said.

Drilling work comes as the miner has already completed desktop exploratory work last year, which gave compelling results for a move on to the ground.

Independent estimates show that the prospect has a strong case for up to 1,3 billion barrels of oil equivalent (BOE) or alternatively an estimated resource of 206 billion litres of oil in the Cahora Bassa Basin in Muzarabani.

It is also estimated to contain 8,2 Tcf plus 250 million barrels of conventional gas/condensate (gross mean unrisked) across five horizons, while the Msasa Prospect identified under the same permit (SG 4571) is estimated to contain 1,05 Tcf plus 44 million barrels of conventional gas/condensate (gross mean unrisked) across three horizons.