Shell announced on Monday that it’s selling the majority of its ownership in the South African business it’s had for 120 years. The multinational oil company made the decision after an extensive review of its oil and renewable energy businesses across all regions.
Its South African downstream unit traditionally consisted of refining, transporting and selling fuel to customers via approximately 700 fuel service stations across the country, as reported by News24.
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‘As a result of this review, Shell has decided to reshape the downstream portfolio and intends to divest our shareholding in Shell Downstream SA (SDSA). Considering SDSA’s illustrious history, this decision was not taken lightly,’ according to the company.
Shell holds a majority share in Shell Downstream SA (SDSA), which was formed by the merger agreement between Shell South Africa and Thebe Investment Corporation 10 years ago, according to Oil Price.
The intention of the partnership was to merge Shell’s marketing and refining businesses with Thebe, a black empowerment group, holding a 28% stake in the downstream business, as reported by Reuters.
Shell and Thebe Investments are still in a heated debate over the value of Thebe’s stake in the project.
A major reason why SDSA may have landed on Shell’s divestment list could be due to the fact that a key asset, the Sapref refinery in Durban, had been shut down since 2022, when partners BP and Shell implemented a ‘spending freeze’ and ordered the refinery’s operations to be shut down.
The refinery was considered problematic for Shell, as flooding in the area caused major damage to the facility, which at one point ‘represented more than one-third of South Africa’s refining capacity’.
In March earlier this year, Shell stated in its energy transition strategy report that it would divest from 1,000 fuel stations this year, as they have directed focus on EV charging stations instead.
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