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South African Court Issues Ruling Revoking Shell’s Exploration Rights

Shell South Africa exploration rights canceled
Contract for the Amazon Warrior to conduct the survey was canceled in late 2021 (Shearwater GeoServices file photo)

Published Sep 4, 2022 12:38 PM by The Maritime Executive

Oil giant Shell has lost another round in its long-running battle over exploration rights along South Africa’s Wild Coast. The company was first awarded the exploration rights in 2014 but had only moved in 2021 to commence the exploration after the government agreed to renew the rights despite protests from environmentalists and local indigenous rights activists. 

In a ruling on September 1, a South African court for a second time ordered Shell to halt the offshore exploration for oil and gas deposits. In a final decision revoking the exploration rights, a panel of three judges noted that the locals were not properly consulted on the project and denied the government’s right to extend the rights for the survey area. It confirmed a similar interim decision from last December.

The local community had taken the case to court seeking review of a decision by the Department of Mineral Resources allowing Shell to conduct Seismic surveys off the pristine Wild Coast. Late last year, Shell moved to begin the survey by hiring Shearwater GeoServices to conduct a 3D seismic survey over an area of more than 2,300 sq. miles beneath the Indian Ocean. The seismic surveys involve a ship towing high-volume air guns, which would blast low-frequency sounds at the seabed at regular intervals.

The survey project was due to run for four months but in December the same court issued an interim order prohibiting Shell from going ahead with its plans. After the court’s decision, Shell confirmed it had canceled the contract with Shearwater based on the court and the ongoing legal battle. The company said it was reviewing the judgment while continuing the legal fight.

The residents of the area argued in court that the decision-makers failed to consider the potential harm of the exploration to the fishers’ livelihood and the ocean life in general. South Africa’s Wild Coast is a 185-mile stretch of water hosting exquisite marine life and nature reserves.

Environmental activists also argued about the impact of the seismic surveys on marine life saying it far outweighs the potential economic benefits. They also cited the contribution of oil and gas companies to climate change.

“As wild coast people, we live off the land and the ocean. Government tells us that oil and gas will bring opportunities but we know very well that this will destroy our livelihoods. The ocean is our best defender against climate change, shielding us from its worst impacts. By helping the ocean, we help ourselves. Ocean action is climate action,” said Siyabonga Ndovela, Wild Coast resident.

Environmental campaigners lauded the judgment as a monumental history for fishermen and rural communities in Wild Coast as well as the marine life in the area.

With the final ruling from the Eastern Cape High Court, Shell now has an option to appeal the judgment at South Africa’s Supreme Court of Appeal.

“We remain committed to South Africa and our role in the just energy transition,” a spokesperson said in response to the court’s decision. The company also repeated its earlier statements, saying that it “respects the court’s decision” and is reviewing the judgment to determine the next steps.