{"id":773706,"date":"2024-05-27T18:23:10","date_gmt":"2024-05-27T16:23:10","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=773706"},"modified":"2024-05-28T10:19:24","modified_gmt":"2024-05-28T08:19:24","slug":"shell-kisses-south-african-service-stations-and-refinery-goodbye","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/773706\/shell-kisses-south-african-service-stations-and-refinery-goodbye\/","title":{"rendered":"Shell kisses South African service stations and refinery goodbye"},"content":{"rendered":"\n

Shell recently announced<\/a><\/strong> that it intends to exit shareholdings in its South African retail, transport, and refining operations.<\/p>\n\n\n\n

Shell said in a statement that it has decided to reshape the downstream portfolio and intends to divest its shareholding in Shell Downstream SA (SDSA).<\/p>\n\n\n\n

SDSA was formed by merging Shell South Africa Marketing and Shell South Refining businesses ten years ago.<\/p>\n\n\n\n

Black empowerment company Thebe Investment Corporation held a 28% equity stake in Shell Downstream SA, and Shell owned 72%.<\/p>\n\n\n\n

However, Thebe Investment Corporation withdrew from its involvement with Shell two years ago. There is now a dispute about the value of shares sold back to Shell.<\/p>\n\n\n\n

Thebe Investment Corporation dismissed claims that it had anything to do with Shell\u2019s exit from the country.<\/p>\n\n\n\n

While Shell is exiting its downstream business in South Africa, it will retain its explorative and extractive activities in the Karoo and off the Wild Coast.<\/p>\n\n\n\n

Shell\u2019s exit from South Africa did not look good for the ruling party, and Mineral Resources and Energy Minister Gwede Mantashe quickly struck back.<\/p>\n\n\n\n

Mantashe warned<\/a><\/strong> that the government may grant fewer oil exploration permits to Shell over its exit from South Africa\u2019s fuel-supply business.<\/p>\n\n\n\n

The announcement also sparked fears of job losses and filling station closures. Shell has a very strong presence in South Africa.<\/p>\n\n\n\n

The Outlier reported that Shell has 591 retail outlets in South Africa, which is one of its biggest global markets.<\/p>\n\n\n\n

Liquid Fuels Wholesalers Association of South Africa CEO Peter Morgan dismissed concerns about job cuts or a lack of filling stations.<\/p>\n\n\n\n

Morgan said Shell will likely follow the same route as in other African nations by leaving a smaller sub-brand in the country, in which it will retain a share.<\/p>\n\n\n\n

Therefore, jobs at its 591 forecourts are not immediately at risk, and the filling stations aren\u2019t likely to shut down.<\/p>\n\n\n\n

He said Shell would exit South Africa but leave behind a smaller sub-brand called Viva. They will find an 80% partner and keep 20% of that.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Shell\u2019s presence in South Africa<\/strong><\/h2>\n\n\n\n

The Outlier reported<\/a><\/strong> that Shell owns about 40,000 fuel service stations worldwide, half of which are in the Americas.<\/p>\n\n\n\n

There are 591 retail outlets in South Africa, the thirteenth-most among the 61 countries where the petroleum giant has a presence.<\/p>\n\n\n\n

Its refinery in Durban has been inactive since the end of March 2022, when it was decided to suspend operations and spending. A month later, floods severely damaged the plant.<\/p>\n\n\n\n

South Africa is not unique. Shell\u2019s divestment from the country is part of a comprehensive review of its global operations.<\/p>\n\n\n\n

Shell has sold downstream assets in Australia, Botswana, Burkina Faso, C\u00f4te d\u2019Ivoire, Guinea, Kenya, and Namibia.<\/p>\n\n\n\n

The company has also been scaling down activity in Malaysia, Uruguay, Paraguay, and Colombia.<\/p>\n\n\n\n

The Outlier reported that South Africa\u2019s roughly 4,000 service stations are split between six main fuel retailers.<\/p>\n\n\n\n

Engen is the leading service station brand in South Africa with 1,040 outlets, followed by Caltex, which rebranded to Astron, with 850, and Shell with 591.<\/p>\n\n\n\n

Total Energies ranks fourth with 547 filling stations, followed by BP with 500 and Sasol with 354.<\/p>\n\n\n\n

The image below, courtesy of The Outlier<\/a><\/strong>, provides an overview of South Africa\u2019s filling station footprint.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Many companies interested in buying the assets<\/h2>\n\n\n\n

Bloomberg reported<\/a><\/strong> that Abu Dhabi National Oil Co. and Saudi Arabia\u2019s state oil producer Aramco are among the companies weighing bids for Shell\u2019s downstream assets in South Africa.<\/p>\n\n\n\n

Sasol is separately considering an offer for the business, which could be valued at more than $800 million.<\/p>\n\n\n\n

Trafigura Group\u2019s Puma Energy subsidiary and Glencore are also among potential suitors that may study the assets ahead of a bid deadline in the coming weeks.<\/p>\n\n\n\n

Deliberations are in the early stages and other bidders could also emerge. A Shell spokesperson said that the company had been approached \u201cby several highly credible parties\u201d without naming the bidders.<\/p>\n\n\n\n

A spokesperson for Adnoc\u2019s listed retail arm, Abu Dhabi National Oil Co. for Distribution PJSC, said the company regularly reviews domestic and international growth opportunities and declined to comment further.<\/p>\n\n\n\n

Representatives for Glencore, Puma Energy, Sasol and Trafigura declined to comment. A spokesperson for Aramco didn\u2019t respond to queries.<\/p>\n\n\n\n

A related development is the state-owned Central Energy Fund (CEF) buying the Sapref refinery from oil majors Shell and BP for R1.<\/p>\n\n\n\n

Mineral Resources and Energy Minister Gwede Mantashe said the deal would address the challenges with South Africa’s refining capacity.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shell plans to sell most South African assets, including its service stations and refinery. However, it will retain its explorative and extractive activities in the county.<\/p>\n","protected":false},"author":10,"featured_media":771044,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[19830,19918,2239,11355],"class_list":["post-773706","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-liquid-fuels-wholesalers-association-of-south-africa","tag-peter-morgan","tag-shell","tag-thebe-investment-corporation"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773706","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=773706"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773706\/revisions"}],"predecessor-version":[{"id":774135,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773706\/revisions\/774135"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/771044"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=773706"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=773706"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=773706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}