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(Bloomberg) — Shell Plc lost an appeal in a South African court that sought to overturn a judgment blocking an offshore oil search opposed by environmental groups, while allowing for the potential renewal of the exploration right.
The groups won a case in 2021 that halted the exploration activity in an area known as the Wild Coast over concerns that communities were not properly consulted and about the impact the survey would have on the climate, local residents and marine life. The high court the following year held that the decisions to grant the exploration right as well as the renewals be reviewed and set aside. Shell appealed.
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South Africa’s Supreme Court of Appeals dismissed the appeal on Monday, according to a summary of the judgment. However, it suspended the orders setting aside the granting of the exploration right and each of the two renewals in 2017 and 2021, pending finalization of the third renewal.
Activists in South Africa have had multiple victories in court against oil exploration activity, while the government has argued that opposing the activity limits economic development. Shell and TotalEnergies SE have made recent discoveries just across its maritime border in neighboring Namibia.
Shell welcomed the court’s direction that the exploration right remains valid, subject to further public consultation and the renewal application, a spokesperson said in an emailed reply to questions. The company is examining the ruling and considering next steps.
The Court of Appeals’ decision “is a disappointing outcome for the communities and supporting organizations” because it allows for the potential renewal of the exploration right, Natural Justice, one of the groups involved in the case, said in a statement. The parties against the activity are considering an appeal to the Constitutional Court.
South African Mineral Resources and Energy Minister Gwede Mantashe has specifically defended oil exploration, citing numerous seismic surveys done in recent years. He was also an appellant in the appeal.
(Updates with comment from Shell in fifth paragraph.)
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