South African Court Rescinds Offshore Oil Permit Over Climate and Community Risks

A South African High Court judge has reversed an environmental approval for oil exploration in a block off the country’s west coast, citing a failure to fully assess the project’s impact on climate change, among other risks.

The environmental impact assessment authorizing French multinational TotalÉnergies SE to explore for oil in Block 5/6/7—part of the Orange Basin off South Africa and Namibia that’s considered a promising new oil frontier—was found to be flawed for failing to consider key impacts on climate change and coastal communities, the Western Cape High Court wrote [pdf] on August 13.

The decision was described as a “huge blow” to TotalÉnergies and Shell, which jointly hold the project with state-owned PetroSA. TotalÉnergies has been operating the block but is seeking to withdraw and transfer the authorization to Shell, while PetroSA would remain a minority shareholder, Reuters reports.

Interest in the basin has grown since Total discovered two major gas fields off South Africa’s east coast in 2019. New drilling off South Africa’s shoreline would extend the oil and gas development already under way further north, in Namibian waters.

But legal challenges are mounting alongside offshore exploration interests, writes The Globe and Mail. Last year, courts ruled that Shell had been unlawfully granted an exploration right for seismic surveys in another offshore block because it failed to properly consult local communities.

The recent ruling responds to a judicial review application filed in March 2024 by Cape Town-based law group Natural Justice and environmental advocacy group The Green Connection. They say South Africa’s Department of Mineral Resources granted TotalÉnergies an exploration right for Block 5/6/7 in 2022 and approved the EA in 2023—despite 18 pending appeals.

The groups asked the court to consider whether the EA should have been granted, arguing it did not fully address how drilling would negatively affect coastal communities, nor its environmental impacts like climate change. The effects of an oil spill or blowout would be devastating and should have been included in the assessment, they added. They also argued that the initial exploration right itself was out of date.

The court did not agree that the exploration right had expired, but sided with the applicants that the EA process was flawed on five grounds:

•It failed to include the impact of a disaster in its socio-economic analysis of how the project would affect communities;

• It ignored factors prescribed by coastal protection laws;

• It did not fully account for impacts on climate change because “no consideration was given to the climate change impacts which will be caused by burning any gas discovered by the proposed project”;

• It failed to assess impacts on neighbouring countries;

• It did not communicate oil spill emergency plans to the public.

“Climate change is relevant to both exploration and production activities,” wrote Justice Nobahle Mangcu-Lockwood. “The two processes are intertwined.”

“It makes no sense to rely on the positive consequences of production stage for purposes of considering an application at exploration stage, only to resist considering the negative consequences of the production stage when it comes to consideration of climate change.”

TotalÉnergies may submit new or amended assessments to address the deficiencies, Mangcu-Lockwood said. A company spokesperson told Reuters it would study the judgment in more detail before deciding on next steps.