Saudi Aramco, Abu Dhabi National Oil and Trafigura are among the companies competing to acquire Shell’s service stations in South Africa, Cape {town} Etc reports.
In addition, the assets have also attracted the attention of South Africa’s Central Energy Fund, which owns PetroSA, as well as Sasol and Oman’s OQ Trading.
Also read: Shell to exit South Africa after 120 years of business
A ‘winner’ could potentially be chosen by the end of 2024, but it may also slip into 2025, as reported by MyBroadband.
Shell may seek to raise ‘nearly $1 billion’ from the sale of its downstream unit in South Africa, anonymous sources have stated.
The divestment includes trading and fuel supply businesses, with the company having a network of 600 service stations across the country, according to its website.
Shell is collaborating with Rothschild & Co. on the sale, with the list of bidders likely to be shortened over the next few weeks and binding offers made by December, according to the sources.
Shell said it doesn’t comment on divestment activities and Rothschild declined to comment, according to MyBroadband.
Talks with Shell are still ongoing and some of the bidders may ‘combine their offers’ while others may withdraw out of the race.
Aramco, Adnoc, Central Energy Fund, OQ Trading, Sasol and Trafigura have declined to comment, with a representative for PetroSA not immediately responding to queries.
Last year, Trafigura and Sasol were involved in a contest for a ‘controlling stake’ in Engen, South Africa’s largest gas station chain.
Trader Vitol Group came out on top, with its Vivo Energy Group retail unit merging with Engen to create a service station and storage business, operating in ‘more than two dozen countries’.
This is part of a wave of traders that are investing in oil’s downstream businesses as margins from buying and selling cargoes are getting thinner.
Currently, Trafigura’s Puma Energy division is already operating as one of the biggest retail fuel suppliers on the African continent.
Oil producers and trading companies are interested in buying retailers, as that provides a demand for fuels that they can then supply.
Adnoc in the United Arab Emirates (UAE) and Saudi Arabia’s Aramco have both been expanding their trading arms as they are looking to break into new markets.
The two companies have recently been active in international dealmaking by entering into contracts for liquefied natural gas supply and taking stakes or options on export terminals.
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