TotalEnergies and QatarEnergy Enter Joint Venture for South African Oil Exploration Block
TotalEnergies and its partner QatarEnergy have bolstered their positions in the South African sector of the Orange Basin by farming into offshore Block 3B/4B, the two companies announced on March 6.
Situated 200 km off the western coast of South Africa and adjacent to TotalEnergies’ Deep Water Orange Basin (DWOB) license in the country, the 17,581 sq km block has been primed for a drilling campaign, according to stakeholders.
“The big issue is that Shell is leaving onshore Niger delta and leaving behind potentially a massive bill for (clean up),” SOMO’s executive director, Audrey Gaughran said.
When it announced the deal in January, it said the Renaissance consortium would take over responsibility for dealing with oil spills in the delta which Shell has long maintained are mostly due to theft of oil and interference with pipelines.
“Following the Venus success in Namibia, TotalEnergies is continuing to progress its exploration effort in the Orange Basin, by entering this promising exploration license in South Africa,” TotalEnergies’ senior vice-president for exploration Kevin McLachlan said in a statement.
“Attracting TotalEnergies and QatarEnergy as our new partners in Block 3B/4B is an endorsement of the exploration potential of the block. These opportunities are on trend with the discoveries in Namibia’s Orange Basin, including Venus in Block 2913B,” said Roger Tucker, CEO of Canada-based Africa Oil. “Both companies have deep geological knowledge of the basin with successful nearby discoveries. TotalEnergies, as the new operator, also brings extensive deepwater drilling and development expertise.”
While the full value of the transaction was not disclosed, the Canadian E&P firm said that the value of the deal to Africa Oil was up to $46.8 million. Eco Atlantic, a pure-play exploration company focused on Atlantic Margins, said the maximum transaction value including carry to Eco Atlantic was up to $32.1 million.
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TotalEnergies also holds offshore South African blocks 5/6/7, Orange Basin Deep, Outeniqua South and 11B/2B, for which it has applied for a production right. The French major discovered two massive gas fields off South Africa in 2019 and 2020.
The country is not yet an oil producer and relies on imports, despite significant hydrocarbon resources. Environmental groups have taken legal action to block oil and gas exploration in South African waters, while delays to key oil and gas legislation have seen industry players view South Africa’s Orange Basin less positively than Namibia’s.
The Upstream Petroleum Resources Development Bill, which is unlikely to become law before South Africa’s May election, would provide greater certainty for operators and producers, advocates say.
