TotalEnergies SE to Exit South African Gas Discoveries to Focus on Namibian Exploration

TotalEnergies SE is planning to exit its gas-condensate discoveries off the coast of South Africa to prioritize exploration efforts closer to Namibia, according to sources familiar with the matter. The French energy giant invested over $400 million to explore South Africa’s challenging coastal waters, discovering an estimated 1 billion barrels of light liquid hydrocarbon at the Brulpadda field in 2019.

This success was followed by the Luiperd well discovery in 2020. However, neither field has advanced to development. TotalEnergies intends to relinquish the license for Block 11B/12B due to doubts about the commercial viability of these deep-water finds, considering South Africa’s limited gas market, one source said. Instead, the company will focus on the Orange Basin, located further north on the Atlantic coast near promising oil discoveries in Namibian waters. A spokesperson for TotalEnergies declined to comment on the matter. This move could significantly impact South Africa, which lacks domestic oil and gas sources. The potential production from these fields was expected to help reduce the country’s dependence on coal and supply feedstock for PetroSA’s 45,000-barrela-day gas-to-liquids plant, which currently relies on depleted fields nearby. Africa Energy Corp., holding a 20% stake in the discoveries, announced its intention to withdraw from the joint operating agreement, having been informed that TotalEnergies’ local unit is “currently reviewing its options.”

Questions directed to Petroleum Agency South Africa were referred to TotalEnergies. South Africa has faced challenges in bringing oil and gas developments online, hindered by legislative uncertainty and delays in passing a new hydrocarbon law. Additionally, environmental groups have increased efforts to block seismic surveys and related activities planned by Shell Plc and other companies.