In a critical step towards enhanced energy security in Southern Africa, energy major Shell has been granted environmental authorization to conduct drilling activities off the west coast of South Africa. The approval follows an application submitted in 2024 and greenlights a five-well campaign aimed at unlocking the potential of the South African side of the Orange Basin.
As a strong advocate for the vital role oil and gas plays in Africa, the African Energy Chamber (AEC) supports the move by the government of South Africa and Shell to explore the country’s offshore hydrocarbon resources. As a country which has long-faced an energy crisis, the exploration and development of oil and gas stands as a beacon of hope for the nation. The AEC –the voice of the African energy sector – considers this a key step towards making energy poverty history across the country and calls on the government to fast-track other applications by companies striving to explore offshore.
Shell’s upcoming drilling campaign could feature as much as five deepwater exploration and appraisal wells, drilled to a depth between 2,500m and 3,200m. Situated in the Northern Cape Ultra Deep Block in the Orange Basin, the wells will determine the viability of the South African side of the basin, with potential resources playing an instrumental part in South Africa’s economic growth trajectory. The block’s potential comes from its close proximity to commercial finds made in Namibia, including the Venus-1X field developed by energy major TotalEnergies. On track for a final investment decision in 2026, the Venus field will position Namibia as a major oil producer, as early as 2029.
Despite the potential of the block, Shell has faced significant opposition by environment groups which have sought to disrupt any progress to alleviate energy poverty through oil and gas resources. Environmental groups including Greenpeace have launched campaigns aimed at preventing Shell from exploring offshore. Under a clarion cry of “To Hell with Shell,” the organization has impeded any progress by the energy major to drill off the coast of South Africa. However, the environmental authorization alleviates this by granting the company the right to continue drilling. The authorization proves that exploration can be conducted in an environmentally-sound manner, enabling Shell to pursue a potential oil discovery.
For South Africa, the commercial discovery of offshore oil and gas resources could mean new opportunities for both fuel security and broader economic growth. As a net importer of oil and gas products, the country relies heavily on international markets, with crude imported from the Middle East as well as other African states. This has not only made the country highly susceptible to fluctuating global oil dynamics but increased the price of fuels and associated products. Through investments in offshore exploration and production, South Africa can address these issues.
While the country witnessed two significant discoveries made by TotalEnergies at the Brulpadda and Luiperd fields in 2019 and 2020, respectively, the company has since deemed these developments commercially-unviable. While a blow to the country, this decision further highlighted the need to expand exploration efforts in other strategic basins, and the Orange basin has emerged as one of the most promising. The company has since expanded its presence in South Africa, acquiring participating interests in Block 3B/4B in 2024. Looking ahead, TotalEnergies and its partner QatarEnergy plan to begin drilling offshore South Africa in 2026, pending regulatory approvals. The companies have requested environmental authorization to drill up to seven wells. In addition to TotalEnergies, companies such as Africa Oil Corp have strengthened their presence in the market, acquiring operatorship of Block 11B/12B. Eco Atlantic also acquired a 75% interest in Block 1 in 2024, showcasing the level of interest in South Africa’s offshore basins.
Exploration efforts are further supported by regulatory reform. South Africa’s Ministry of Mineral and Petroleum Resources has been advocating for increased exploration in the country, seeking to address challenges that continue to impact fuel security. Through policy changes and new regulation, the government has sought to improve the operating climate for foreign companies, enticing new players to invest in frontier exploration. Regulations include the Upstream Petroleum Resources Development Act of 2024, which promotes the development of petroleum resources by providing security of tenure in respect of exploration and production operations. Beyond these policies, faster approval timelines – and in particular, a focus on fast-tracking environmental authorizations – will prove key to realizing the true potential of South Africa’s oil and gas industry.
“We have said it time and time again: drill, baby drill. This milestone marks the start of a new era of energy development in South Africa and is poised to reshape the trajectory of the country’s economic growth. But the work is only beginning. The country has a lot of work to do if it is to realize the potential of its oil and gas industry. The AEC calls for greater coordination across the industry, faster approval timelines and increased investment offshore,” stated NJ Ayuk, Executive Chairman of the AEC.
Nicolas Nhede
energychamber.org
