Until now, South Africa's national oil company PetroSA was thought to be the only potential buyer of the gas that TotalEnergies should begin producing on its block 11B/12B from 2027. But a recent visit by the French major's CEO has changed all that.
The French major has no time to lose if it is to achieve its goal of starting production on the South African offshore block by 2026-2027. There are still the rights, final investment decision, pipeline connection and numerous other administrative and logistical tasks to work out.
As expected, the final draft of the Petroleum Bill provides for the state to have a carried interest of 20% in oil permits. Energy companies are hoping to get the National Assembly, which will examine the bill over the next few weeks, to modify this provision.
Taking advantage of a favourable climate and existing infrastructure in South Africa, Total is looking at the option of speeding up expansion at a reduced cost. This will depend to a large extent on a good working relationship with the state, which owns the pipeline and the GTL plant to which the French major hopes to sell its gas.
The French major says it has suspended the preliminary process of drilling a new well on its South African block to allow it to focus on two existing discoveries. But the move is actually aimed at stepping up pressure on Pretoria.
To try to limit the impact of the recession which is looming after several months of public health crisis, the South African government is banking on the prospect of gas revenues to come and has rolled out the red carpet for Total.
South Africa's energy ministry is struggling to find hydrocarbon experts among its civil servants to help set up the new national petroleum company, but it is reluctant to turn to the private sector or recruit internationally.