Norway's Equinor has decided to drop its extensive exploration acreage offshore South Africa to focus on more attractive upstream assets following a disappointing seismic campaign, the company said Aug. 27.
Equinor, formerly Statoil, entered South Africa in 2015 after buying a 35% stake in the Tugela South block led by ExxonMobil. It currently has four deepwater exploration licenses off the country's eastern coast, three of which are partnered with Exxon.
Separately, Exxon was not immediately available to comment on a report that it has also decided to leave the South Africa upstream acreage.
"Following an assessment of acquired seismic data and with increased competition within our exploration portfolio, these opportunities do not rank well enough compared to other opportunities," an Equinor spokesman said.
Following regulatory approvals to exit the blocks, Equinor will no longer hold upstream licenses in the country, the spokesman said.
The move comes less than two years after Equinor last grew its South African exploration footprint with a 50% farm-in into Exxon's huge, 50,000 square km (19,305 square miles) Deepwater Durban exploration license.
New Brulpadda drilling
The decision to drop the deepwater permits also comes as French oil major Total is preparing fresh exploration drilling near South Africa's first deep-water discovery.
Total's Brulpadda gas condensate find off Mossel Bay in the Western Cape in mid-2019 was one of the year's biggest global discoveries. Brulpadda is estimated to hold about 1 billion barrels of oil equivalent of gas and condensate.
In addition to the Tugela South and Deepwater Durban blocks, Equinor holds a 35% stake in the Transkei-Algoa block, another large permit covering 45,000 square km along the coast of eastern South Africa. Exxon operates the block with a 40% and partner Impact Africa has the remaining 25% stake.
The company also operates South Africa's East Algoa block with a 90% interest with 10% partner OK Energy.
