Shell Secures Major Offshore Expansion in South Africa’s Orange Basin with PetroSA Farm-In Deal
South Africa’s state-owned PetroSA has approved a farm-in agreement granting Shell Offshore a 60% operating stake in Block 2C, significantly expanding the oil major’s presence in the strategic Orange Basin, according to a company document reviewed by Reuters.
The Orange Basin, located along the maritime border between South Africa and Namibia, has become a leading exploration hotspot following several major discoveries in Namibia by TotalEnergies and Shell. If finalized, the deal would mark Shell’s largest expansion in South African offshore acreage to date.
Under the agreement, Shell will pay a $25 million signing bonus and cover $135–$150 million for a three-well exploration program, effectively carrying PetroSA through the initial drilling phase. PetroSA currently holds 100% of Block 2C, but the transfer of interest is still subject to approval by the Petroleum Agency of South Africa (PASA).
Shell declined to comment on the specifics of the deal, citing commercial sensitivities, while PetroSA, now part of the newly formed South African National Petroleum Company, did not respond to requests for comment.
The transaction aligns with Shell’s broader strategy to expand offshore exploration along South Africa’s western coast. In July, the company received environmental authorization to drill up to five ultra-deepwater wells in the Northern Cape Ultra Deep Block.
However, environmental groups have filed legal challenges that have delayed these projects. Shell is also appealing a high court ruling that blocked seismic surveys in Block 5/6/7, following concerns that community consultations were inadequate.
These developments occur within a shifting regulatory landscape. A 2025 advisory opinion from the International Court of Justice emphasized that governments must phase out fossil fuels and regulate private companies to prevent climate-related harm.
South African environmental groups, including Natural Justice and The Green Connection, have cited this ruling in their appeals against Shell’s approvals, arguing that the cumulative emissions impact must be considered.
As Shell advances its exploration ambitions while facing increasing legal scrutiny, Block 2C is poised to become a high-profile case in balancing energy development with climate responsibility in South Africa.
