French oil giant, TotalEnergies, has warned it may suspend its oil and gas exploration projects in South Africa, citing persistent legal and regulatory setbacks that have stalled progress.

In a statement reported by industry media on Monday, October 6, TotalEnergies said it could halt operations if delays in the permitting process continue. 

Nicolas Terraz, the company’s President of Exploration & Production, criticised what he described as “unacceptable delays” in project approvals, warning that they are undermining execution timelines.

The warning reflects growing frustration within the company over mounting legal challenges and bureaucratic hurdles that have slowed offshore exploration efforts.

Court ruling adds to setbacks

In August, the Western Cape High Court annulled an environmental authorization previously granted to TotalEnergies and its partner Shell for drilling on block 5/6/7 off South Africa’s southern coast. 

The court ruled that the original impact study failed to adequately assess climate risks and potential harm to coastal communities.

Since then, new permit applications have become bogged down in what TotalEnergies describes as a slow and uncertain regulatory process.

Investment risks and energy strategy at stake

TotalEnergies warned that continued procedural obstacles could discourage foreign investment in South Africa’s oil sector and jeopardise the country’s broader energy strategy. 

The government views offshore resources as critical to reducing reliance on imported gas and supporting its energy transition, but faces resistance from environmental groups and coastal communities.

In May, the company said it hoped to begin offshore drilling next year.

This follows its announcement in 2024 to exit South Africa’s downstream sector to concentrate on upstream operations.

It holds exploration rights in several blocks, including Deep Water Orange Basin (DWOB), Orange Basin Deep (OBD), Outeniqua South, and 3B/4B. 

However, in July 2024, it announced plans to exit the 11B/12B gas block due to a prolonged stalemate over gas monetization.

Tensions between development and environmental safeguards

The dispute reveals a growing tension between South Africa’s energy ambitions and its environmental obligations. 

As global energy firms seek new frontiers, the balance between economic development and ecological protection remains a contentious issue.

TotalEnergies’ warning adds pressure on Pretoria to streamline its permitting process or risk losing major international partners in its energy future.

In August, Shell launched a formal appeal against the government’s decision barring the company from drilling in the Northern Cape Ultra Deep (NCUD) oil and gas project.

Local environmental groups had moved to reverse Shell’s right to drill in the deepwater project off South Africa’s West coast, claiming Shell did not do due diligence on environmental impact assessments. 

Legal actions like these have caused some of South Africa’s huge hydrocarbon reserves to remain unexplored. 

The Karoo shale gas reserves, for instance, have remained banned after ecological concerns were raised by environmental groups.