Impact of Total Energies withdrawal from offshore blocks; DMPR legislative programme; with Ministry

The Committee met to receive an update from the Department of Mineral Resources and Energy on developments in the upstream gas and petroleum sector following the withdrawal of Total Energies from exploration activities off the country’s southern and western coastlines. The Minister said the decision to withdraw Total Energies from the offshore blocks resulted from commercial considerations and was not the end of exploration there, as there were other companies interested in filling the gap left by their withdrawal. During the discussion, Members were told that the main reason involved the price of gas. Total Energies had wanted to have a firm offtake agreement, which would be influenced by a gas price that would be commercially viable for them. However, the price that would have made the project commercially viable for Total Energies was not commercially viable for Petro SA. The Department advised the Committee that Total Energies was not entirely leaving oil and gas opportunities in South Africa, as they still held exploration rights, together with its various joint venture partners, over four offshore blocks. The Committee therefore welcomed the fact that Total Energies remained a major player in the South African energy sector, and that other companies had shown an interest in picking up where Total Energies had left off. Although it regretted the termination of projects with huge potential, it was encouraged that Total Energies was still involved in the exploration work in the Orange Basin off the west coast. A Member questioned whether the involvement of a Russian bank in the project had been a factor in the withdrawal. The Minister strongly rejected this suggestion, pointing out that South Africa was a member of BRICS and so was Russia, and therefore it could not take a harsh position towards Russia because the West was hostile to them. The Committee was taken through the Department's legislative programme for 2024/25, including the timeframes for the submission of bills to Parliament. There were two bills related to the mineral sector, and four involving the energy sector. The Chairperson made a plea for the legislation to be submitted to Parliament in time to avoid pressure being put on the Committee.