Untrue that TotalEnergies gave up extracting Mossel Bay gas deposits because of govt regulations

CAPE TOWN - The Department of Mineral and Petroleum Resources says it won’t give up on potential interest in extracting the offshore gas deposits near Mossel Bay.

It says it once again plans to open the fields to the market.

Speaking at the African Energy Week in Cape Town, Minister Gwede Mantashe said it was untrue that TotalEnergies had given up on mining the area because of government policy and regulations.

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Mineral and Petroleum Resources Director-General Jacob Mbele said it’s accepted that TotalEnergies could not justify the cost of mining the gas fields given its other competing commercial demands.

But government is moving on.

"Our interest is that the exit must happen as soon as possible to allow for the project to move to the next stage."

Mantashe said it was too soon to say whether there was new interest in mining the two gas blocks.

While he accepted the cost involved in extracting the gas in a rough Agulhas current, he said government could not agree to the cost of selling that gas to the market.

"We cannot justify that we pay extra for that to make it commercially viable for Total and make it a disaster for ourselves."

While the gas fields will be crucial in reinvigorating the defunct Mossel Bay refinery, assessments as part of a potential financing deal with Russia's Gazprombank are still underway.

Mantashe said with TotalEnergies still actively exploring for oil in the Orange River basin, it was untrue that government policy had been a deterrent to doing business in the country.