TotalEnergies 11B/12B offshore gas field could make a direct annual contribution of at least 8 billion rand ($457 million) to South African government finances, the country's petroleum regulator said on Thursday.
"That is not just the overall GDP contribution but is the direct fiscal contribution from the royalties as well as the primary taxes," Phindile Masangane, chief executive at the Petroleum Agency of South Africa (PASA), told delegates at an oil conference.
TotalEnergies lodged its production licence application for Block 11B/12B on Sept. 5 before a deadline expired which might have seen the oil major forfeit its right to develop two huge gas field discoveries - Brulpadda and Luiperd off South Africa's southern coast.
Development of the field will represent a major milestone in South Africa reducing its dependence on imported oil and refined petroleum products, although new gas and oil projects are being challenged in courts amid environmental concerns.
Another PASA official, chief operations officer Bongani Sayidini, said that South Africa has an estimated 60 trillion cubic feet (TCF) of offshore gas prospects.
Phase one of TotalEnergies' deep-water field could cost up to an estimated 45 billion rand [around $2,5 billion] to develop, with first gas seen in 2027, he said.
"Discovered volumes can sustain 560 million standard cubic feet per day," Sayidini said, enough to supply a gas-to-liquid refinery in Mossel Bay currently operating well below capacity due to feedstock shortages.
Excess gas could potentially supply converted Eskom power plants or even a new 3,000 megawatt power plant, he added.
TotalEnergies is the operator with joint venture partners in Block 11B/12B including QatarEnergy, Canadian Natural Resources (CNQ.TO) and local consortium Main Street.
South Africa's coastline remains largely under-explored, although a new well is expected to be drilled in Block 2B on the West Coast next month, said Sayidini.
($1 = 17.4733 rand)
(Reuters - Reporting by Wendell Roelf; Writing by Anait Miridzhanian; Editing by Alexander Winning, Kirsten Donovan)