PetroSA Approves Shell as Majority Partner in Offshore Block 2C | South Africa Energy News

PetroSA Approves Shell as Majority Partner in Offshore Block, Marking Major Energy Shift in South Africa

On 8 December 2025, official documents revealed that South Africa’s state-owned petroleum company PetroSA approved Shell as the majority partner in the offshore Block 2C, located off the country’s western coast. This decision is being viewed as a major strategic move to strengthen South Africa’s energy security and attract large-scale foreign investment into its oil and gas sector.

Under the terms of the agreement, Shell will acquire a 60% operating stake in Block 2C, while PetroSA will retain the remaining 40% ownership. As part of the deal, Shell has agreed to pay a $25 million signing bonus and fully fund the drilling of three offshore exploration wells, with estimated costs ranging between $135 million and $150 million. This significantly reduces the financial risk for PetroSA, while accelerating offshore exploration timelines.

Block 2C is located in the highly promising Orange Basin, an area that has gained global attention following major hydrocarbon discoveries in neighboring Namibia. Energy analysts believe the geological similarities between the two regions increase the probability of commercially viable oil and gas reserves in South African waters. If successful, this project could drastically reduce South Africa’s dependence on imported fuel and stabilize the nation’s long-standing electricity and energy supply crisis.

The deal is also expected to generate new employment opportunities, boost technical skill development, and attract additional international oil and gas companies to explore South African offshore resources. Government officials have described the partnership as a strategic step toward long-term energy independence and economic growth.

However, the project has not been free from controversy. Several environmental groups and coastal fishing communities have raised concerns about the potential impact of offshore drilling on marine ecosystems and local livelihoods. They argue that deep-sea exploration could disrupt marine biodiversity and threaten fishing-dependent communities. In previous cases, Shell faced legal challenges over similar offshore drilling activities, leading to temporary suspensions and court appeals in certain South African coastal blocks.

Energy experts stress that the success of this partnership will depend heavily on strict environmental compliance, transparent operations, and active community engagement. PetroSA and Shell have both stated their commitment to following international environmental standards and local regulatory frameworks as the project moves forward.

Overall, this approval represents one of the most significant developments in South Africa’s offshore energy sector in recent years. If exploration drilling yields positive results, the Orange Basin could become a major regional energy hub. This partnership between PetroSA and Shell has the potential to reshape South Africa’s energy future, enhance national energy security, and position the country as a competitive player in the global oil and gas market.