TotalEnergies, the French oil major, announced on Monday its decision to withdraw from an offshore natural gas block off South Africa’s southern coast, citing commercial challenges in developing the discoveries.
Earlier this month, the company indicated plans to exit Block 11B/12B, marking a significant setback for South Africa’s ambitions to achieve energy independence through its largest offshore gas discoveries to date.
TotalEnergies entered Block 11B/12B in 2013 and made two gas discoveries, Brulpadda and Luiperd. However, the company stated that turning these discoveries into commercial developments proved too challenging to economically develop and monetize for the South African market.
The statement from TotalEnergies did not elaborate on the specific challenges faced. Oil companies operating in the region have encountered various obstacles, including legal challenges from environmentalists and bureaucratic delays, which have dampened investor interest in South Africa’s offshore exploration. The area’s rough seas and strong currents further complicate exploration efforts.
TotalEnergies’ exit follows a previous decision by its Canadian partner, CNRI, to withdraw from Block 11B/12B.
The South African government had viewed this block as a potential supplier of gas to the idle gas-to-liquid plant at Mossel Bay, operated by national oil and gas company PetroSA.
TotalEnergies held a 45% stake in Block 11B/12B and has also decided to exit offshore exploration in Block 5/6/7, where it had a 40% interest.
Despite these withdrawals, the company has retained its stake in Block 3B/4B, located on South Africa’s side of the Orange Basin, just south of significant discoveries made by Galp, Shell, and TotalEnergies’ own Venus discovery in neighboring Namibia.
