TotalEnergies to remain in South African offshore gas projects
According to estimates, the development of the Brulpadda field requires investments of $3 billion.
The South African authorities have received assurances from the French energy group TotalEnergies that it will not withdraw from projects to develop large natural gas fields on the country’s southern shelf. This was reported by the representative of the National Energy Regulator of South Africa, Tulebona Nxumalo, adding that the South African side held consultations with TotalEnergies after information appeared in the media about the group’s intention to leave the Brulpadda and Luiperd gas projects.
“We asked TotalEnergies for clarification and the company responded that it initially planned to withdraw from these projects, but after discussions with the [South African] government and other interested parties, it decided to stay,” local news portal News 24 quotes Nxumalo as saying. “Everything suggests that TotalEnergies will remain in the Brulpadda project.”
In early July, Bloomberg reported, citing its own sources, that TotalEnergies intended to exit projects to develop deepwater gas fields on the southern shelf of South Africa. On July 1, Canadian Natural Resources, which holds a 20% stake in the Brulpadda and Luiperd projects, announced its exit. The license issued by the South African government for exploration and development of two sites at the Brulpadda and Luiperd fields does not provide for the sale of their shares by the participants; they must be distributed among the partners who will remain in the project. The decision must be made by them within 30 days from the moment one of the participants exits the projects. Currently, the French group holds 45% of the capital of both projects.
In 2019, TotalEnergies discovered the largest gas condensate field in this part of Africa, Brulpadda, on the southern shelf of South Africa, with reserves of 1 billion barrels. A year later, its specialists discovered another deep-water gas condensate field, Luiperd, near it. Total exploration costs for TotalEnergies amounted to $400 million.
The fields are located in the area where the Atlantic and Indian Oceans meet, which is characterized by a very strong current, which creates significant technical difficulties for gas production. According to estimates, the development of the Brulpadda field requires investments of $3 billion.
To date, South Africa does not have a single large natural gas field under development. The country imports it primarily from Mozambique and Qatar. Meanwhile, the government intends to convert a significant part of the existing thermal power plants from coal to gas, which will increase the country’s needs many times over.
