TotalEnergies exits S’African gas fields over economic challenges

French energy giant TotalEnergies said on Monday it was withdrawing from two offshore gas fields in South Africa as they did not appear economically viable.

A subsidiary of TotalEnergies owns a 45 per cent stake in a block off the country’s southern coast where the fields, Brulpadda and Luiperd, were discovered.

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.”

The block, spanning 19,000 square kilometres (7,335 square miles), is located 175km (109 miles) off the South African south coast.

Qatar Petroleum, which holds a 25 per cent interest in the block, also announced its intention to withdraw from the project, said Africa Energy Corp, a Canadian oil and gas exploration company with a 10 per cent stake through a subsidiary.

Another partner, CNR International which owns 20 per cent of the block, had announced its departure earlier in July.

Africa Energy Corp said it did not intend to withdraw from the project and noted that under a joint agreement, companies that pull out of the block would give up their stakes for free to those that stay.

The company said the gas fields were “the largest discoveries of natural gas resources in South Africa.”

It added, “If developed, it could supply a significant portion of the country’s energy needs as it seeks to transition away from coal-fired power plants.”

Environmental groups have opposed the project, warning that drilling in the deep waters would threaten the region’s biodiversity and fishermen.

AFP