South Africa Overturns Ruling that Halted Shell’s Wild Coast Exploration

Oil supermajor Shell won a reprieve for Wild Coast offshore exploration after a South African appeals court suspended an earlier ruling from a lower court that had halted exploration activities due to environmental concerns, Reuters reports. 

Shell targeted South Africa's Wild Coast for oil exploration in 2014, sparking backlash from indigenous peoples in this eastern region of the country who were concerned about the potential for land and water contamination. 

Local environmental activists campaigned against exploration, winning a High Court ruling that effectively revoked Shell's permit, according to activists from Living on Earth (LOE). On Monday, however, the South African appeals court suspended the High Court ruling, which paves the way for Shell and other oil companies eyeing the Wild Coast to argue their case in another round of public consultations, according to Reuters, which noted that the initial ruling against Shell revolved highly around the lack of a public consultation. 

In its Monday ruling, the appeals court recognized oil companies' exploration rights,  including renewals that were handed out in 2017 and 2021. 

"In the circumstances ... considerations of justice, equity and the principles of finality and certainty dictate that the harshness of the exploration right being set aside can and should be ameliorated," the ruling, published electronically, said. 

The South African Court of Appeals described the High Court's finding that "authorising new oil and gas exploration, with its goal of finding exploitable oil and/or gas reserves and consequently leading to production, is not consistent with South Africa complying with its international climate change commitments" as having a "sterilising effect" that "cannot be endorsed".

The "sterilising effect" refers vaguely to the development of new offshore oil and gas in neighboring Namibia and Mozambique that has reinvigorated investor interest in "final frontier" oil in Africa, rendering the Wild Coast more poignant than it was when the original ruling halted exploration.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

• OPEC Resolves Compensation Plans for Overproducing Members
• The Pipeline Project Preparing for Canada's Largest Ever Corporate Bond Deal
• 76% of Small Offshore Oil Companies at Risk