Africa Energy the last man standing as TotalEnergies quits offshore gas finds

Africa Energy Corp is the only party retaining an interest in SA&#039;s first and only major offshore gas. However, it is confident the discoveries can be commercially developed, despite 100-year-old oil and gas major TotalEnergies concluding otherwise.On Monday, TotalEnergies announced it would withdraw from block 11B/12B off the coast of Mossel Bay, Western Cape, in which it holds a 45% interest.The oil and gas major said that the two large gas discoveries made there – Brulpadda and Luiperd – could not be turned into a commercial development "as it appeared to be too challenging to economically develop and monetise these gas discoveries for the South African market."The news came amid mounting speculation of TotalEnergies&#039; exit after another stakeholder, Canadian Natural Resources International (CNRI), with a 20% stake in the block, announced its plans to exit in early July.QatarEnergy, which holds a 25% interest, has also now provided notice of its divestment, while Africa Energy Corp has confirmed its intention to remain invested.TotalEnergies has also decided to withdraw from Block 5/6/7 off the coast of Cape Town, where its South African subsidiary holds a 40% interest, but the company continues to hold stakes in deep water blocks offshore of South Africa, where the bulk of the Orange Basin extends.Securing approvalAs the 100% owner of Block 11B/12B, Main Street 1549 will be focused on securing the block&#039;s production right approval as well as offtake customers, Africa Energy said. When it comes to offtake, industry experts and insiders have noted the defective design of government&#039;s gas-to-power programme as a likely driver behind TotalEnergies&#039; decision to exit the block."The existing Gas to Power Request for Proposal (RFP) effectively stopped 11B/12B from bidding, by virtue of a load factor ranging between 40% and 75%, with a targeted drop down to 25% by year five," said Paul Eardley-Taylor, Standard Bank&#039;s head of Southern African Oil & Gas, referring to a measure of electricity a plant must produce relative to its maximum."This is operationally non-doable for deep water offshore gas. It will be very interesting to see if the amended RFP, now due 25 March, will allow 11B/12B to be able to bid a power plant at Mossel Bay."

Africa Energy the last man standing as TotalEnergies quits offshore gas finds

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