BP plans big expansion in South Africa – as Shell heads for the door

 ·14 May 2024

Petrochemical group BP says that it has drawn up a “long-term” strategy for its presence in South Africa, which includes expanding its over 500 forecourts and upgrading their service offerings across the country.

The group has been in South Africa for 100 years in May 2024, and said it would remain in the country “for as long as (it) needs us”.

This comes in stark contrast to competing petroleum group, Shell, which has outlined its plans to exit its South African downstream business, which includes over 600 service stations.

In the wake of that announcement, which has dented South Africa’s appeal as an investment destination, BP said it wanted to “signal its commitment to a long-term future” in the country.

“From our forecourt to our partners in retailing, storage and distribution, we are dedicated to remaining a forward-looking, responsible and effective steward of South Africa’s energy supply networks for as long as the country needs us,” BP South Africa CEO Taelo Mojapelo said.

The group said it has drawn up a strategic roadmap for the long term, with three key goals:

  1. To expand and high-grade the portfolio of over 500 service stations, while growing the number of forecourts owned by black entrepreneurs or run by black franchisees.
  2. Upgrading and expanding its forecourt offerings.
  3. Optimising its supply model.

“BPSA’s strategy fits into the global group’s broader focus on reimagining energy, as BP pivots from being an international oil company that produces resources to an integrated energy company that delivers solutions for customers,” it said.

Farewell Shell

Shell confirmed this month that it is selling its shareholding in Shell Downstream South Africa, which includes a network of 600 gas stations across the country, following a review of its business across regions and markets.

While the group aims to remain in the upstream sector, this has been pulled into question with mineral resources and energy minister Gwede Mantashe threatening to punish the group over its decision by being “reluctant” to give them licences.

According to Liquid Fuels Wholesalers Association of South Africa’s CEO, Peter Morgan, Shell’s exit from the downstream businesses has been overblown, noting that the company is unlikely to fully abandon its service stations.

Morgan said Shell would probably follow the same approach it has taken in other African countries, where it will leave a smaller sub-brand, Viva, in the country, where it will retain a percentage of ownership.

This means the roughly 600 forecourts and the jobs they provide are not immediately at risk, and the sites are not likely to close down entirely.

Read: Investors vote with their feet: CEO

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