TotalEnergies Exits Two South African Gas Fields

Confidence UbaniJuly 29, 20241 Mins read123

TotalEnergies has announced its withdrawal from two offshore gas fields in South Africa due to economic challenges. Block 11B/12B and Block 5/6/7 are located offshore South Africa.

The French energy giant holds a 45% stake in Block 11B/12B and decided to withdraw after its partner, QatarEnergy, announced its exit from the development.

In a statement on Monday, TotalEnergies said they could “not be turned into a commercial development as it appeared to be too challenging to economically develop and monetise these gas discoveries for the South African market.”

In addition to Block 11B/12B, TotalEnergies is also withdrawing from offshore exploration Block 5/6/7. The company stated that the challenges in monetising the gas discoveries led to its decision. Its subsidiary, TotalEnergies EP South Africa, currently holds a 40% interest in Block 5/6/7.

QatarEnergy, which holds a 25% interest in Block 11B/12B, has notified the joint venture partners that it will withdraw from the project. Africa Energy Corp owns a 10% stake in the block and said it does not intend to withdraw. The company said it is confident that the resources can be commercially developed.

The withdrawal of TotalEnergies and its partners has to undergo regulatory approvals by South African authorities. The exit of TotalEnergies and QatarEnergy is a significant blow to South Africa’s plans to increase gas usage for power generation as the country seeks to transition away from coal-fired power plants. The Brulpadda and Luiperd discoveries were the largest discoveries of natural gas resources in South Africa and could have supplied a significant portion of the country’s energy needs if developed.