Oil major TotalEnergies has informed the South African authorities of its intention to withdraw from the 11B/12B offshore gas field, but has not yet submitted a formal request to do so, a source at Petroleum Agency, the government agency responsible for promoting oil exploration and development, said on Tuesday.

The French group had discovered significant gas reserves in Block 11B/12B off the South African coast in 2019. Its withdrawal from the project is a setback for South Africa, which was counting on this gas to supply a gas liquefaction plant in the port city of Mossel Bay.

Gas price negotiations between TotalEnergies and the national oil and gas company PetroSA have been at a standstill for years. At the same time, the French major has invested heavily in exploration in Namibia, where significant discoveries have been made.

"The main reason (for the withdrawal) is the inability to secure a market for the gas," said the source, speaking on condition of anonymity.

TotalEnergies did not immediately respond to a request for comment on this information, first reported by Bloomberg.

(Written by Wendell Roelf and America Hernandez; Blandine Hénault for the French version, edited by Camille Raynaud)