Italy looking to Angola for gas. EU interested in African gas

This morning we saw the following Bloomberg article which highlighted Italy’s recent deal to boost natural gas imports from Angola as the country tries to move away from a dependence on Russian energy imports.

At the moment Italy receives ~40% of its gas supplies from Russia and the Italian prime minister and ex-president of the European Central Bank, Mario Draghi said “We are delivering on our commitment to diversify energy sources”.

As part of the agreement, Italy will increase its gas purchases from Angola and will also look to be involved in the joint development of energy projects. The Bloomberg article also states that the PM would then look to travel to the Republic of Congo and later to Mozambique looking for similar deals.

We were already well aware of Europe's interest in looking south to replace its energy dependence on Russia, the move by the Italian government now provides for some macro tailwinds for other African energy projects.

We have exposure to this thematic through our 2020 Energy Pick of the Year, Invictus Energy (ASX:IVZ) which is less than 2 months away from drilling the largest seismically defined, undrilled oil and gas structure in onshore Africa.

IVZ's Oil & Gas project is located in Zimbabwe and has a prospective resource (100% Gross Basis) of 9.25 trillion cubic feet (TcF) Gas + 294m barrels of Conventional Gas-Condensate and is of a big enough size that in the event a successful discovery is made, we think the Europeans could start to show some interest.

We made our first investment in IVZ back in September 2020 primarily because of its elephant scale prospective resource. Since then we have been patiently waiting for the upcoming drilling program which is now scheduled to take place in June.

To see all of the reasons why we invested in IVZ, what we want to see the company achieve in 2022 and the key risks to our investment thesis, check out our 2022 IVZ Investment Memo by clicking on the image below.