By Afolabi Samuel Odunayo
South Africa’s economic challenges may have intensified as two major energy companies, TotalEnergies and Qatar Petroleum, have announced their withdrawal from significant gas exploration projects in the country.
This decision comes despite recent gas discoveries that were initially seen as promising.
TotalEnergies, a French multinational energy giant , has decided to exit from two offshore gas fields located off South Africa’s southern coast.
The company’s departure is a direct result of the decision by the Corporation for National Research Initiatives (CNRI) to divest its 20% stake in Block 11B/12B.
TotalEnergies holds a 45% stake in this block, which includes the Brulpadda and Luiperd gas fields.
The company stated that the economic viability of developing and monetizing these discoveries for the South African market was too challenging. The gas fields, covering an area of 19,000 square kilometers (7,335 square miles) and situated 175 kilometers (109 miles) offshore, were deemed economically unfeasible by TotalEnergies.
On its part, Qatar Petroleum, which has a 25% stake in the same block, has also announced its withdrawal.
Africa Energy Corp, a Canadian oil and gas exploration company with a 10% stake through a subsidiary, confirmed its intention to remain involved.
Africa Energy Corp noted that, according to a joint agreement, departing companies will forfeit their stakes to the remaining partners.
It would be recalled that earlier in July, CNR International, which owns 20% of the block, also announced its exit from the project.
Despite the withdrawals, Africa Energy Corp maintain that the gas fields represent the largest natural gas discoveries in South Africa and could potentially supply a significant portion of the country’s energy needs, particularly as South Africa seeks to reduce its reliance on coal-fired power.
