The CBM development is one of the country’s most advanced gas prospects and forms part of government’s long-standing strategy to build domestic energy supply and reduce dependence on imports. Botala is developing the resource through a phased plan anchored on 108 wells and a future liquefied natural gas (LNG) plant expected to produce 3.5 petajoules (PJ) annually. Under the proposal MDCB, which is government's minerals investment firm, will inject P30 million for a 15% equity stake in Botala’s subsidiary, Botala Gas (Pty) Ltd, which holds the project. The company will also pay P5 million for a one percent royalty on the ex-works price, payable annually over 20 years once commercial production begins.
The funds are earmarked for the five-well Pitse Pilot, which initiates the broader four-phase development plan. Directors at Botala Energy told investors through a notice on the Botswana Stock Exchange that the revised term sheet signals government’s growing confidence in the Serowe CBM resource and its commercial potential. “Botala is making firm progress to secure the Government of Botswana’s participation in its Serowe CBM project, evidenced by MDCB’s commitment to significantly increase its proposed investment,” said Botala CEO, Kris Martinick. He added that MDCB had alternatives under the state’s back-in rights linked to the mining licence but elected to go further, further sighting confidence in the project and financial potential of the project once it fully goes live.
