GARDEN ROUTE NEWS - CNR International (South Africa) Limited issued a notice to its joint venture partners that it will withdraw its 20% interest from gas discoveries off the south coast of South Africa.
Since then it has been reported that TotalEnergies SE plans to withdraw its 40% interest from the area.
Articles by Bloomberg and Reuters, published on their websites on 2 July stated that, according to anonymous sources with knowledge on the matter, TotalEnergies plans to exit its discoveries and relinquish its licence for Block 11B/12B.
According to the article by Bloomberg's Francois De Beaupuy and Paul Burkhardt, which BusinessTech also published, the exit comes due to the company doubting the commercial viability of its finds, especially in South Africa's gas market.
The Reuters article stated that the media house had spoken to an anonymous source at Petroleum Agency SA (PASA), who said it had notified the regulator it intends to withdraw.
Mossel Bay Advertiser sent queries to TotalEnergies and PASA.
TotalEnergies spokesperson Stéphanie Dezaunay said the company "doesn't comment on the matter".
PASA referred the Advertiser to TotalEnergies for comment.
Africa Energy Corp.
However, a statement by Africa Energy Corp. - one of the partners in the offshore blocks - read that it had been advised that TotalEnergies is currently reviewing its options with regards to its 45% interest in Block 11B/12B.
Image: Sourced/Africa Energy Corp
It also stated that another partner in the offshore block, CNR International (South Africa) Ltd, "provided notice to the joint venture partners that it will withdraw from its 20% interest in accordance with the joint operating agreement".
It read that Africa Energy, which holds 10% interest through its investment in Main Street, does not intend to withdraw.
"The Company (Africa Energy) believes that natural gas will play a critical role in South Africa's energy transition, and the use of indigenous gas from the Block 11B/12B discoveries are currently the most material domestic supply option in South Africa," read the statement.
Block 11B/12B
According to the TotalEnergies website, www.totalenergies.co.za, it said the company, as the operator, and its joint venture partners discovered gas and condensates (hydrocarbon gas form that condenses at surface temperature into a light oil) in 2019 and 2020.
The joint venture partners are Canadian Natural Resources International, Qatar Energy and MainStreet 1549.
The information on the website reads that two successful exploration wells, Brulpadda and Luiperd, were drilled in the Paddavissie fairway, between 75km and 120km offshore from the south coast between Mossel Bay and Cape St. Francis, with water depths ranging from 200 to 1 800 meters.
It read that the "commercial production of natural gas forms part of South Africa’s integrated resource Plan and energy transition process towards achieving net-zero carbon by 2050" and that TotalEnergies' "discovery of commercially viable natural gas could assist in meeting the country’s energy demands during the transitionary period while contributing to the economy".
PetroSA
PetroSA told Mossel Bay Advertiser that while it does not hold any equity in the licence, the price that this joint venture will ask for the gas and condensate will determine if the market, possibly PetroSA’s gas-to-liquied (GTL) Refinery or a gas-to-power project, can afford it.
"PetroSA believes the discovery can be commercially viable for all parties and is a resource that can grow and sustain the Southern Cape economy for more than 15 years once production commences," said PetroSA spokesperson Nonny Mashika-Dennison.
"Any gas discoveries made in the area can contribute towards security of energy supply for South Africa. The gas can be utilised to manufacture fuels at the GTL refinery or for gas-to-power projects, which will grow the Southern Cape economy."
She said the project could facilitate job creation and will have secondary and tertiary macro-economic benefits for the area whilst contributing to the balance of payments by reducing imports of liquid fuels into South Africa.
She added that gas-to-power projects assist South Africa in moving towards cleaner energy.
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