R4 trillion international giant suffers another major loss in South Africa
Shell lost the latest round of a five-year legal fight with environmental activists over a South African oil-exploration campaign that went all the way to the nation’s top court.
The oil major, valued at over R4 trillion, won’t be allowed to renew an exploration right off South Africa’s rugged Indian Ocean Wild Coast, the Constitutional Court ruled on Friday.
The decision comes as other offshore South African oil searches are challenged, while Namibia approaches the development of crude discoveries just over the maritime border.
“What the ConCourt decided was that the exploration right should be set aside,” said Melissa Groenink Groves, an attorney and program manager at Natural Justice, an applicant in the case.
A Shell spokesman wasn’t immediately able to comment.
The decision could further embolden activists who have had multiple victories in court against oil explorers.
The legal saga began in 2021 with activists opposing a seismic survey planned by Shell and a local partner in an area where whales are frequently spotted.
Environmental groups won an interdict that halted the exploration activity over concerns that communities weren’t properly consulted, and about the impact the survey would have on local residents and marine life.
The following year, a high court set aside the decision to grant the exploration right, along with two subsequent renewals.
Shell’s appeal was dismissed, though the Supreme Court of Appeal later handed the London-based company a reprieve by ruling that a third renewal, which was pending, could proceed subject to proper consultation.
Environmental groups argued that the Appeals Court erred by giving Shell the opportunity to apply for renewal of a right that has been set aside and, therefore, no longer exists.
Shell and TotalEnergies SE are among the explorers looking to utilise prospects to drill offshore South Africa, after discoveries in Namibia’s waters in 2022 turned the area into one of the continent’s exploration hotspots.
TotalEnergies SE Chief Executive Officer Patrick Pouyanne described South Africa as having a complex legal environment to explore.
“Each time we want to do it, we need to go to court,” he said in a 30 November earnings call. “It’s a little difficult.”
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