TotalEnergies SE is reportedly planning to withdraw from its gas-condensate discoveries off the coast of South Africa to redirect its exploration efforts closer to Namibia, according to sources familiar with the matter.
The French energy giant ventured into South Africa’s challenging offshore conditions, investing approximately $400 million to uncover an estimated 1 billion barrels equivalent of light liquid hydrocarbons at the Brulpadda field in 2019, as reported by Bloomberg.
Subsequently, TotalEnergies achieved another successful find at the Luiperd well the following year, but neither discovery has progressed to the development phase.
Earlier this year, TotalEnergies announced its intention to divest from onshore oil operations in Nigeria, which represent 8 to 10 percent of the company’s global production and over 18 percent of its worldwide investment.
Now, in South Africa, the company plans to relinquish its license for Block 11B/12B due to concerns about the commercial viability of the complex deep-water discovery, particularly given South Africa’s relatively small gas market, according to insider sources who preferred anonymity.
Instead, TotalEnergies will shift its focus to exploring the Orange Basin, situated further north along South Africa’s Atlantic coast, near promising oil discoveries in Namibian waters.
Economic Implications:
TotalEnergies’ withdrawal from these discoveries represents a setback for South Africa, which currently lacks substantial domestic sources of oil and gas.
The anticipated production from these fields was expected to contribute to reducing the country’s reliance on coal and to provide raw materials for PetroSA’s 45,000-barrel-a-day gas-to-liquids plant, which currently depends on other nearby depleted fields.
