Gwede Mantashe Highlights SA's Oil and Gas Potential Amid Recent Discoveries

Addressing the withdrawal of TotalEnergies from offshore Blocks 11B/12B and 5/6/7, Mantashe insisted that development in these areas remains viable.

Mineral and Petroleum Resources Minister Gwede Mantashe has announced significant discoveries of gas and condensate from two exploration wells in the South Outeniqua Basin, asserting that these findings showcase the untapped potential of South Africa's deep waters for oil and gas exploration. His comments came during the Africa Oil Week at the Cape Town International Convention Centre.

Key Discoveries and Industry Insights

Mantashe referenced the recent successes of TotalEnergies, Shell, and Galp in Namibia, where eight discoveries across three blocks in the Orange Basin have estimated recoverable oil resources of 3.5 billion barrels. He noted that the excitement surrounding these discoveries has led to increased interest from major petroleum companies, particularly as there is speculation that the rich deposits in Namibia may extend into South African waters.

"The discoveries of gas and condensate from two exploration wells drilled in Block 11B/12B offshore in the South Outeniqua Basin have also proven that South Africa’s under-explored deep waters have significant potential for oil and gas, signalling a need to accelerate exploration efforts,” Mantashe emphasized.

Response to TotalEnergies Withdrawal

Addressing the withdrawal of TotalEnergies from offshore Blocks 11B/12B and 5/6/7, Mantashe insisted that development in these areas remains viable. He stated, “There remains good potential for other oil and gas players to partner with the remaining operator – MainStreet – and develop the block." He highlighted that TotalEnergies' continued investments in other blocks north of the Orange Basin indicate their ongoing confidence in the region.

Upcoming Exploration Projects

Minister Mantashe outlined several upcoming exploration initiatives in the South African Orange Basin, which are poised for development:

Preparation for Drilling: TotalEnergies is gearing up for drilling in the Deep-Water Orange Basin (DWOB).

Block 3B/4B Exploration: Proposed drilling of an exploration well, with the possibility of drilling up to four additional wells.

Northern Cape Ultra-Deep-Water Block: Environmental authorisation processes for drilling have commenced.

Block 5/6/7: Significant progress has been made with potential drilling exploration expected to begin in 2026.

Legal Challenges Impacting Exploration

Mantashe cautioned that legal challenges remain a risk for these exploration projects, referencing litigation that has previously impacted seismic surveys. He noted, "This has already affected two major seismic surveys, including Shell’s, which abandoned their survey but subsequently discovered oil and gas in Namibia." He underscored the successful completion of 3D seismic data acquisition on South Africa’s west coast, indicating that exploration can proceed without environmental harm.

SAPREF Acquisition and Future Investment Opportunities

The Minister also acknowledged the Competition Commission's approval of the government's acquisition of assets related to SAPREF, a joint venture refinery located in Durban. This acquisition is part of efforts to ensure a stable supply of petroleum products in light of several refineries being prematurely shut down. Mantashe remarked, “Shell’s decision to divest from its downstream business operations in South Africa opens opportunities for other investors or major oil companies to take over these assets, as the downstream sector remains attractive with the rise of hybrid vehicles.”

In closing, Mantashe urged delegates and the investment community to continue investing in the oil and gas sector, highlighting the importance of these industries in fostering a prosperous energy outlook for Africa and promoting sustainable development.