The Zimbabwean government has the opportunity to be the largest shareholder and beneficiary of the Muzarabani gas and oil exploration project, Invictus has said.
In an interview with business publication newZWire, vice chairman of Invictus Energy, Joe Mutizwa, said:
My expectations are that there are 2 aspects to this. First, is we have just struck an agreement with the Sovereign Fund of Zimbabwe, which will be getting a 10% buy-in into the project, once we have done the appraisal and we are in the final investment decision stage. The Sovereign Wealth Fund, which is obviously the government of Zimbabwe, gets 10%.
But over and above that, production share agreement envisages that the Goverment of Zimbabwe in total will take at least 55 to 60% of the total value of the project. Whether that is in the form of product or in the form of revenues is for the Government of Zimbabwe to choose. So they will be by far the Major beneficiaries of whatever we find here.
Which I think is a fair deal, ok the investors have taken a risk and have invested, but the resource belongs to Zimbabwe. And the investment must percolate and sip through the entirity of Zimbabwean economy. This will have a major impact on the budget. This will have a major impact on foreign currency earning capacity. It will be transformative in terms of infrastructure. And one can go on. There’s tremendous downstream opportunities that can be exploited. So this is just the beginning.
Invictus has said it will start exploration drilling for oil and gas in early September.
Zimbabwe passed the Sovereign Wealth Fund of Zimbabwe Act law in November 2014 and then set up the Sovereign Wealth Fund (SWF) itself in 2015. In 2020, the government announced that it had set aside US $100 million for the SWF. Generally, it get its funds from balance of payment surpluses, official foreign currency operations, the proceeds of privatisation, government transfer payment, a fiscal surplus and natural resource earnings.