TotalEnergies Quits ‘Too Challenging’ South African Gas Finds

(Bloomberg) -- TotalEnergies SE has quit its gas-condensate discoveries off the tip of South Africa, in a blow to a country that’s planning to use more of the fuel for power production.

The company exited the Brulpadda and Luiperd finds because “it appeared to be too challenging to economically develop and monetize these gas discoveries for the South African market,” TotalEnergies said in a statement on Monday. Bloomberg reported earlier this month that TotalEnergies planned to leave because the discoveries couldn’t be made commercially viable.

The decision comes as South Africa, which imports all its oil and gas, plans to use more of the fuel to reduce its dependence on coal for power generation. Potential production from the fields was also earmarked as feedstock for state-owned PetroSA’s 45,000-barrel-a-day gas-to-liquids plant.

South Africa’s mineral and petroleum resources department didn’t immediately answer questions seeking comment. 

Mineral and Petroleum Resources Minister Gwede Mantashe has defended oil exploration, even as environmentalists opposed activity by Shell Plc and other companies. The passage of new oil legislation is intended to give explorers clarity they’ve previously lacked.

TotalEnergies spent at least $400 million, using unprecedented engineering solutions to drill in one of the fastest ocean currents in the world. It found an estimated 1 billion barrels equivalent of light liquid hydrocarbons at the Brulpadda field in 2019, and had further success at the Luiperd well the following year, but neither progressed to development.

The company is also exiting from an oil block 5/6/7 in waters off Cape Town. However, TotalEnergies remains in Block 3B/4B and other areas closer to the maritime border with Namibia where significant discoveries have been made.

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