South Africa’s state-owned PetroSA has approved a farm-in deal that gives Shell Offshore a 60% operating stake in Block 2C, boosting the oil major’s presence in the strategic Orange Basin, according to a company document reviewed by Reuters.
The Orange Basin, which spans the maritime border between South Africa and Namibia, has emerged as a leading exploration hotspot after several giant discoveries in Namibia by TotalEnergies and Shell. If completed, the deal would mark Shell’s largest expansion in South African offshore acreage so far.
Under the agreement, Shell would pay a $25 million signing bonus and cover $135–$150 million for a three-well exploration program, carrying PetroSA through the initial drilling phase. PetroSA currently owns 100% of Block 2C, but the transfer of interest still needs approval from the Petroleum Agency of South Africa (PASA).
Shell declined to comment on the deal details due to commercial sensitivities but stated that it continually evaluates opportunities to grow its business. PetroSA, now part of the newly formed South African National Petroleum Company, did not respond to requests for comment.
The deal comes as Shell advances its ambitions along South Africa’s western offshore. In July, the company received environmental authorization to drill up to five ultra-deepwater wells in the Northern Cape Ultra Deep Block, although environmental groups have filed legal challenges that have delayed progress. Shell is also appealing a high court ruling that blocked seismic surveys in Block 5/6/7 after community groups argued that environmental consultations were insufficient.
These legal challenges are unfolding in a changing regulatory context. A 2025 advisory opinion from the International Court of Justice affirmed that governments must phase out fossil fuels and regulate private companies to prevent climate harm. South African groups, including Natural Justice and The Green Connection, have cited this ruling in their appeals against Shell’s drilling approvals, arguing that the cumulative impact of emissions must be considered.
With Shell pushing to expand exploration and environmental groups using new international legal guidance, Block 2C could become a key case in balancing energy development with climate responsibility in South Africa.
African Energy Council