Court ruling could reshape South Africa's offshore energy rules amid Orange Basin dispute

South Africa’s Constitutional Court is expected to rule later this year on a case first launched in 2021, and the outcome could fundamentally reshape the country’s offshore energy regulatory framework. That single pending judgment captures the broader governance crisis now separating South Africa from its neighbor Namibia in the race to develop the Orange Basin, a shared petroleum province whose reserves represent billions of dollars in potential investment, tax revenue and employment.

The contrast became visible in June when two developments, arriving in the same week, underscored the widening gap. Shell announced what it called the “most promising subsurface results to date” from a well offshore Namibia, part of a broader push toward first oil by 2030 through TotalEnergies’ Venus project, expected to initially produce around 150,000 barrels per day. Meanwhile, environmental groups and fishing communities packed a Cape Town courthouse to challenge a permit allowing TGS to conduct offshore seismic surveys in South Africa’s portion of the basin.

Additional reference context is available at https://clubofmozambique.com/news/south-african-namibian-fortunes-diverge-in-shared-orange-basin-oil-province/.

The permitting process itself has become a significant barrier to entry. The Offshore Petroleum Association of South Africa reports that exploration permits can take up to five years to secure in South Africa, compared with three to nine months in other African countries. Current South African regulations, spanning multiple ministries, allow for wide-ranging internal appeals against environmental and social impact assessments as well as judicial reviews whose outcomes can themselves be appealed. This layered oversight structure has created what industry observers describe as an unpredictable investment climate.

The Petroleum Agency South Africa, the country’s petroleum regulator known as PASA, has acknowledged that legal challenges have delayed up to 10 wells expected to be drilled by 2030. Environmental groups and local communities have launched at least four court cases and numerous other appeals against South African offshore ventures and proposed onshore liquefied natural gas projects since 2021, according to eco-justice group Green Connection.

TotalEnergies CEO Patrick Pouyanne put the frustration plainly during October’s results presentation. “We cannot explore, we cannot spend money in a geography if we have to face courts permanently and the permitting becomes really too complex,” he said. TotalEnergies has acquired acreage along South Africa’s west coast and aimed to drill its first exploration well this year, but those plans are now uncertain. OPASA spokesperson Niall Kramer warned that the pattern carries a direct cost: “A similar route of long delays threatens to frustrate South Africa should there be any discoveries.”

The Constitutional Court case at the center of this regulatory uncertainty was first launched in 2021. It concerns a challenge by environmental groups and local communities to a Shell-led seismic survey along the tourism-dependent Wild Coast. The court is expected to determine whether commercial interests can outweigh the rights and dignity of coastal communities. Environmental lawyer Ricky Stone described the stakes plainly: “This judgment will be one of the most significant precedents in South African environmental and constitutional law in a generation, whatever the Constitutional Court decides.”

Petroleum Minister Gwede Mantashe has backed oil and gas development and supports industry calls for specialized courts to handle energy disputes, signaling government intent to streamline the approval process. Whether that reform agenda can advance depends heavily on how the Constitutional Court rules.

South Africa’s west coast has shown some geological promise. The Ibhubesi gas field is estimated to contain about 540 billion cubic feet of gas and 4.3 million barrels of condensate. A well drilled by Eco Atlantic Oil and Gas in 2022, Gazania-1, found light oil-associated gases, though not enough to justify development. Eco Atlantic CEO Gil Holzman argued the experience demonstrated that drilling need not cause environmental harm. “We drilled and nothing happened. So, we are living proof that one can actually drill in the basin, leave the surface untouched, and it had zero negative impact on the local communities, zero impact at all on the environment,” he told Reuters.

Coastal communities remain unconvinced. Stanley Young, a 65-year-old small-scale fisherman from Port Nolloth, spoke outside the Cape Town courthouse during the TGS case hearing. “The ocean provides for us for generations and we must protect it. If oil and gas comes in here, it will destroy our livelihoods completely,” he told Reuters.

The Orange Basin, formed millions of years ago when South America separated from Africa and named after the river marking the border between the two countries, has become a test case for how African states balance commercial energy ambitions against community rights and environmental obligations. With Namibia advancing toward production and South Africa still navigating its courts, the question now is whether the Constitutional Court ruling will clarify the rules of engagement, or deepen the uncertainty that has already cost the country years of exploration activity.