TotalEnergies exits South African offshore gas fields, cites economic challenges

TotalEnergies has announced its exit from South African offshore gas fields over economic challenges.

In a statement on Monday, TotalEnergies said this decision follows the withdrawal of its partner, CNR International (South Africa), a subsidiary of Canadian Natural Resources (CNR).

“Following the decision of the partner CNRI to withdraw from Block 11B/12B, TotalEnergies also announces its withdrawal from this block, off the Southern coast of South Africa, in which its affiliate TotalEnergies EP South Africa holds a 45% interest,” TotalEnergies said.

TotalEnergies said it entered the oil blocks in 2013, where it made two gas discoveries: Brulpadda and Luiperd.

The company, however, said these discoveries could not be turned into commercial development as it appeared too challenging to develop and monetise economically for the South African market.

In addition, TotalEnergies said it has also decided to exit offshore exploration blocks 5, 6, and 7, where TotalEnergies EP South Africa currently holds a 40 percent interest.

Spanning 19,000 square kilometres (7,335 square miles), the blocks are said to be located 175km (109 miles) off South Africa’s south coast.

According to media reports, Qatar Petroleum, which holds a 25 percent interest in the blocks, also announced its intention to withdraw from the project.

CNRI which owns 20 percent of the blocks, had announced its departure earlier in July.

TotalEnergies EP Nigeria Limited sold its stake in Shell Petroleum Development Company (SPDC) joint venture (JV) to Chappal Energies for $860 million on July 18.

According to a statement, Chappal Energies entered into a sale and purchase agreement (SPA) to acquire TotalEnergies’ 10 percent non-operated interest in its onshore and shallow water assets within the SPDC JV in the Niger Delta.

The transaction is expected to be finalised by December 31.