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By NJ Ayuk, Executive Chairman, African Energy Chamber (https://EnergyChamber.org/)

It is not an exaggeration to say that South Africa's offshore gas discoveries offer up a potential economic transformation for the country that would be on par with Guyana's oil-driven boom or Suriname's emerging energy sector. 

Estimates for the Luiperd-Brulpadda gas-condensate project, in Block 11B/12B off South Africa's southern coast, gauge its holdings at 3.4 trillion cubic feet (tcf) of gas and 192 million barrels of gas condensate. Production at this site would equate to thousands of jobs and a revitalization of regions like Mossel Bay, where South Africa's gas-to-liquids refinery once fueled local employment and industry before declining production forced cutbacks. 

Unfortunately, this could all be just wishful thinking, as TotalEnergies' exit from this project in 2024 revealed a critical barrier. 

South Africa's gas potential is currently locked up, partly because of legal challenges initiated by environmental activist groups that halted projects to the tune of USD1.6 billion, but also due to the inability of all parties involved to come to an agreement on gas purchase pricing.  

The GTL Solution 

A gas-to-liquids (GTL) strategy — one that links prices to liquefied natural gas (LNG) spot markets and includes meaningful community engagement — would help balance the needs of upstream investors, downstream users, and the coastal communities while delivering sustainable growth for the rest of the nation. 

The gas pricing dilemma is the main obstacle.  

Upstream companies like TotalEnergies demand dollar-based contracts to mitigate currency risk and ensure returns on their substantial exploration investments. The South African government is justifiably wary of dollar-denominated agreements and would prefer rand-based prices to protect local consumers and maintain affordability. The impasse TotalEnergies encountered on this issue is one of the factors behind their withdrawal from Block 11B/12B, despite their promising, hard-won discoveries at the site.  

The domestic market complicates the situation even further.  

Electricity producers require low gas prices, as they operate on slim margins once carbon costs are accounted for. Upstream operators, on the other hand, need to collect higher prices to justify the development of their capital-intensive deepwater projects. Meanwhile, the global LNG market is expected to remain saturated for the next three to five years, making the export of gas in the form of LNG a less competitive option for now. Without a pricing compromise, South Africa's gas remains untapped, leaving behind all the profit and opportunity it represents.

A GTL strategy offers a multifaceted solution, however. By revitalizing the PetroSA GTL facility in Mossel Bay and converting natural gas into high-value liquid fuels like diesel and kerosene on site, South Africa could cut its reliance on fuel imports, strengthen its energy security, and extend employment opportunities to thousands of workers.

The precedent is clear: In Suriname, TotalEnergies' GranMorgu deepwater project is set to generate 6,000 local jobs and inject at least USD1 billion into the economy. A similar initiative at the dormant Mossel Bay facility could transform South Africa's southern coast, providing the government with fresh revenue and wider economic stability.

This is not mere optimism; this gameplan would be a practical means of leveraging existing infrastructure to drive regional development. But, once again, the economic viability of a GTL strategy as a solution for South African gas production hinges on securing a gas pricing agreement that satisfies the needs of both producers and consumers.

To resolve this pricing stalemate, South Africa should adopt a formula that ties the gas purchase price to the global LNG spot price, minus a percentage to reflect the absence of liquefaction and transportation costs. This approach would allow upstream companies to receive dollar-based payments, satisfying their financial requirements while aligning with the inherent shifts in the global market. Downstream, power producers and GTL operators would enjoy the affordability of discounted pricing, making projects economically feasible at both ends of the supply chain.

Furthermore, the government could incentivize GTL development through tax breaks, infrastructure subsidies, or public-private partnerships, so the economic benefits of these projects would be more likely to outweigh the initial costs. This pricing model would be a fair compromise that avoids the pitfalls of rand-based contracts and meets the needs of all stakeholders. 

Additional Roadblocks

Overcoming environmental opposition is another critical step toward progress in gas development, and overlooking community engagement in this regard only empowers non-governmental organizations (NGOs) to challenge projects in court. Petroleum Agency SA's community awareness campaigns, which educate locals about the benefits and risks of gas development, offer a model for improvement in this area. Expanding such efforts to include early and transparent engagement in the environmental impact assessment (EIA) process would help build trust and reduce grounds for legal action.

Town hall meetings and accessible EIA summaries would be a means of highlighting the economic benefits of a GTL strategy. By involving communities as stakeholders, the government and industry can work together to demonstrate that gas development can create shared prosperity.

The implementation of a GTL strategy is itself another way of addressing the legal pushback brought against South African exploration projects. Liquid fuels produced domestically reduce emissions by avoiding long-distance shipping, meaning that a GTL strategy is already in alignment with environmental goals from the start. Emphasizing the lower carbon footprint of a GTL operation would go a long way in gaining public approval of the project, but the government must still work to speed up the permitting process by establishing clear, time-bound guidelines for EIAs and consultations. Mechanisms should also be put in place to limit repetitive, post-approval legal challenges and allow projects to proceed without endless litigation.

A dedicated task force of industry, government, and local representatives would strengthen South Africa's negotiating power and help hold projects accountable to environmental and social standards.

A Collaborative Path Forward 

Extracting and monetizing the gas resources held in Block 11B/12B and elsewhere could be a course-correcting game-changer for South Africa, but doing so to the greatest possible benefit requires bold, collaborative action. For South Africa to truly benefit from its gas resources, President Cyril Ramaphosa's administration must move beyond the traditional focus on coal and mining, prioritize gas development, and embrace the potential of a GTL strategy.

By reviving the defunct Mossel Bay GTL facility and implementing a pricing model tied to LNG spot prices, the government can satisfy the needs of both upstream and downstream stakeholders while creating jobs for South Africans and reducing their dependency on imports. Simplifying the permit process and expanding community engagement would address environmental concerns so that projects can move forward without unnecessary delays or lawsuits.

With decisive leadership and a commitment to balance, South Africa can transform its gas potential into a catalyst for sustainable growth and secure a prosperous future, not just for the industry, but for the nation as a whole. 

Distributed by APO Group on behalf of African Energy Chamber.

• Link to the Inaugural Session of Merck Foundation First Ladies Initiative – MFFLI Summit 2025: https://apo-opa.co/4p6eQE7

Merck Foundation (www.Merck-Foundation.com), the philanthropic arm of Merck KGaA Germany, conducted the 7^th Edition of Merck Foundation First Ladies Initiative - MFFLI Summit 2025 on 19^th and 20^th June in Dubai, United Arab Emirates. It was inaugurated by Prof. Dr. Frank Stangenberg-Haverkamp, Chairman of Merck Foundation Board of Trustees, and Senator, Dr. Rasha Kelej, CEO of Merck Foundation and President of Merck Foundation First Ladies Initiative along with The First Ladies of 14 African and Asian countries, who joined as the Guests of Honor and Keynote Speakers.

Senator Dr. Rasha Kelej, CEO of Merck Foundation and President of “Merck Foundation First Ladies Initiative” emphasized, “It is my great honor to welcome our esteemed Guests of Honor and Keynote Speakers, The First Ladies of Africa and Asia, and Ambassadors of our ‘More Than a Mother' campaign to the 7^th Edition of the Merck Foundation First Ladies Initiative – MFFLI Summit.

Through this important platform, we have collectively exchanged valuable experiences and engaged in meaningful discussions on the impact of our programs, which are aimed at transforming patient care and raising awareness of a wide range of critical social and health issues.”

Prof. Dr. Frank Stangenberg Haverkamp, Chairman of Merck Foundation Board of Trustees added, “At Merck Foundation, our goal is improving overall health and well-being by building healthcare capacity and by providing access to quality & equitable healthcare solutions in the Africa, Asia and beyond. I would like to sincerely thank our Ambassadors and partners. Together, with your unwavering support and collaboration, we will continue to work towards our vision of a world where everyone can lead a healthy and happy life.”

The First Ladies of 14 countries, who are also the Ambassadors of “Merck Foundation More Than a Mother”, joined as Guests of Honor and Keynote Speakers. They are:

• H.E. Dr. ANA DIAS LOURENÇO, The First Lady of the Republic of Angola
• H.E. Dr. DÉBORA KATISA CARVALHO, The First Lady of the Republic of Cabo Verde
• H.E. Madam BRIGITTE TOUADERA, The First Lady of the Central African Republic
• H.E. Madam ZITA OLIGUI NGUEMA, The First Lady of the Gabonese Republic
• H.E. Mrs. FATOUMATTA BAH-BARROW, The First Lady of the Republic of The Gambia
• H.E. Mrs. LORDINA DRAMANI MAHAMA, The First Lady of the Republic of Ghana
• H.E. Mrs. RACHEL RUTO E.G.H., The First Lady of the Republic of Kenya
• H.E. Mrs. KARTUMU YARTA BOAKAI, The First Lady of the Republic of Liberia
• H.E. Mrs. SAJIDHA MOHAMED, The First Lady of the Republic of Maldives
• H.E. Dr. GUETA SELEMANE CHAPO, The First Lady of the Republic of Mozambique
• H.E. Senator OLUREMI TINUBU, CON, The First Lady of the Federal Republic of Nigeria
• H.E. Mrs. MARIA DE FATIMA VILA NOVA, The First Lady of the Democratic Republic of São Tomé and Príncipe
• H.E. Madam MARIE KHONE FAYE, The First Lady of the Republic of Senegal
• H.E. Amai Dr. AUXILLIA MNANGAGWA, The First Lady of the Republic of Zimbabwe

Senator, Dr. Rasha Kelej stated, “I am proud to share that Merck Foundation has provided more than 2400 scholarships for young doctors from 52 countries in 44 critical and underserved specialties. Many of our Merck Foundation Alumni are becoming the first specialists in their countries. Together with our Ambassadors and Partners, we are making history and transforming the patient care landscape across Africa and beyond. Many of them are becoming the first specialists in their countries.”

“During our Conference, we also marked together the World Infertility Awareness Month, observed in June, through our signature campaign “Merck Foundation More Than a Mother”, which aims to empower infertile and childless women by providing access to information, education, and change of mindset. I am happy to share that out of the total 2400 scholarships, more than 760 scholarships have been provided for training in Fertility, Embryology, Sexual and Reproductive Medicine, Clinical Psychiatry, Women's Health, Urology, Laparoscopic Surgical Skills, and Family Medicine, to improve access to fertility care and women's health”, she further added. 

During the 7^th Edition of Merck Foundation First Ladies Initiative -MFFLI Summit, two important occasions were marked; the 8^th Anniversary of Merck Foundation and 13 years of Merck Foundation's development programs that started in 2012.

On the first day, the Plenary Session of the Merck Foundation First Ladies Initiative -MFFLI Summit took place, featuring a high-level panel discussion with the participating First Ladies of Africa and Asia. Moreover, a high-level ministerial panel discussion was held with African Ministers and top healthcare experts from across the globe.

The Day 2 of the conference will have three key parallel session will be held- Two medical and scientific sessions covering Oncology and Fertility Topics, and a community awareness session, Merck Foundation Health Media Training. This session will emphasize the critical role of the media in influencing communities and driving cultural change, with regards to a wide range of social and health issues like Breaking Infertility Stigma, Supporting Girls' Education, Stopping GBV, Ending Child Marriage & FGM, Empowering Women, Diabetes and Hypertension Awareness.

The conference is being conducted in a hybrid format, enabling over 6,000 audiences from more than 70 countries to benefit, meet and discuss strategies and solutions for the health and social challenges in their countries safely and effectively.

Countries participating in the 7^th Edition of Merck Foundation First Ladies Initiative:

Angola, Bangladesh, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Canada, Central Africa Republic, Cambodia, Chad, Côte d'Ivoire, Republic of the Congo, Democratic Republic of the Congo, Egypt, Ethiopia, France, Gabon, Germany, Ghana, Guinea – Bissau, Guinea – Conakry, India, Indonesia, Kenya, Lesotho, Liberia, Malawi, Malaysia, Maldives, Mali, Mauritania, Mauritius, Mexico, Mozambique, Myanmar, Namibia, Nepal, Niger, Nigeria, Peru, Philippines, Russia, Rwanda, Senegal, Sierra Leone, Somalia, South Africa, Sri Lanka, Sudan, Tanzania, Thailand, The Gambia, Togo, Tunisia, U.A.E, UK, Uganda, US, Vietnam, Zambia, Zimbabwe and more.

The 7^th Edition of Merck Foundation First Ladies Initiative is streamed live on the social media handles of Merck Foundation and Senator, Dr. Rasha Kelej, CEO of Merck Foundation:

@ Merck Foundation: Facebook (http://apo-opa.co/445CBE4), X (http://apo-opa.co/4p93EGW), Instagram (http://apo-opa.co/3WTSRV0), and YouTube (http://apo-opa.co/3LDai9M).

@ Rasha Kelej: Facebook (http://apo-opa.co/4pbHoME), X (http://apo-opa.co/4oCQ4M3), Instagram (http://apo-opa.co/3WPky1b), and YouTube (http://apo-opa.co/4oAA4df).

Link to the Inaugural Session of Merck Foundation First Ladies High Level Panel: https://apo-opa.co/4p6eQE7

Merck Foundation is transforming the Patient care landscape and making history together with their partners in Africa, Asia, and beyond, through:

• 2400+ Scholarships provided by Merck Foundation for healthcare providers from 52 Countries in 44 critical and underserved medical specialties.  

Merck Foundation is also creating a culture shift and breaking the silence about a wide range of social and health issues in Africa and underserved communities through:

• 3700+ Media Representatives from more than 35 countries trained by Merck Foundation to raise awareness about different social and health issues
• 8 Different Awards launched annually for best media coverage, film, song and fashion
• Around 30 songs to address health and social issues, by local singers across Africa
• 9 Children's Storybooks in four languages - English, French, Portuguese and Swahili
• 6 Awareness Animation films in five languages - English, French, Portuguese, Spanish and Swahili to raise awareness about breaking infertility stigma, supporting girl education and prevention and early detection of Diabetes, Hypertension & Cancer
• Pan African TV Program "Our Africa by Merck Foundation” addressing Social and Health Issues in Africa through “Fashion and ART with Purpose” Community
• 1040+ Scholarships provided annually to high performing but under-privileged African schoolgirls from 18 countries, to empower them to reach their full potential
• 15 Social Media Channels with more than 8.5 Million Followers.

Distributed by APO Group on behalf of Merck Foundation.

Contact:
Mehak Handa
Community Awareness Program Manager
Phone: +91 9310087613/ +91 9319606669
Email: mehak.handa@external.merckgroup.com

Join the conversation on our social media platforms below and let your voice be heard! 
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Flickr: http://apo-opa.co/448i3Lb
Website: www.Merck-Foundation.com
Download Merck Foundation App: https://apo-opa.co/4i3dibS

About Merck Foundation:
The Merck Foundation, established in 2017, is the philanthropic arm of Merck KGaA Germany, aims to improve the health and wellbeing of people and advance their lives through science and technology. Our efforts are primarily focused on improving access to quality & equitable healthcare solutions in underserved communities, building healthcare & scientific research capacity, empowering girls in education and empowering people in STEM (Science, Technology, Engineering, and Mathematics) with a special focus on women and youth. All Merck Foundation press releases are distributed by e-mail at the same time they become available on the Merck Foundation Website.  Please visit www.Merck-Foundation.com to read more. Follow the social media of Merck Foundation: Facebook (http://apo-opa.co/445CBE4), X (http://apo-opa.co/4p93EGW), Instagram (http://apo-opa.co/3WTSRV0), YouTube (http://apo-opa.co/3LDai9M), Threads (http://apo-opa.co/4pdkkNv) and Flickr (http://apo-opa.co/448i3Lb).

The Merck Foundation is dedicated to improving social and health outcomes for communities in need. While it collaborates with various partners, including governments to achieve its humanitarian goals, the foundation remains strictly neutral in political matters. It does not engage in or support any political activities, elections, or regimes, focusing solely on its mission to elevate humanity and enhance well-being while maintaining a strict non-political stance in all of its endeavors.