French oil major TotalEnergies announced on Monday that it will withdraw from an offshore natural gas block off South Africa’s southern coast, citing commercial development challenges.
TotalEnergies had initially signaled its intention to withdraw from Block 11B/12B earlier this month.
The company explained in a statement that the gas discoveries, Brulpadda and Luiperd, made in this block could not be economically developed and monetized for the South African market.
“TotalEnergies entered into Block 11B/12B in 2013 and made two gas discoveries, Brulpadda and Luiperd, which could however not be turned into a commercial development as it appeared to be too challenging to economically develop and monetize these gas discoveries for the South African market,” the company stated without providing further details about the specific challenges faced.
Environmental court challenges and bureaucratic delays have significantly dampened investor interest in South Africa’s offshore zone. Additionally, the region’s rough seas and strong currents complicate exploration efforts.
TotalEnergies’ exit from Block 11B/12B follows the earlier withdrawal of its Canadian partners CNRI.
The South African government had hoped the block could supply gas to the idle gas-to-liquid plant at Mossel Bay, operated by the national oil and gas company PetroSA.
TotalEnergies, which held a 45% stake in Block 11B/12B, also decided to exit offshore exploration on the west coast in Block 5/6/7, where it held a 40% interest.
However, the company retained a stake in Block 3B/4B, located on South Africa’s side of the Orange Basin.
This block lies just south of significant discoveries by Galp, Shell, and TotalEnergies’ own Venus discovery in neighboring Namibia.
