Energy giant Shell to exit South Africa’s downstream businesses

AFRICAN BUSINESS AND ECONOMYMay 12, 2024 at 6:16 PM UTC

TLDR

Shell decides to divest majority shareholding in South African downstream unit, SDSA, established a decade ago.
The decision reflects Shell's global realignment strategy after maintaining a presence in South Africa for over a century.
Despite the divestment, Shell remains interested in offshore opportunities in South Africa amidst environmental activist opposition.

Oil giant Shell has decided to divest its majority shareholding from a local South African downstream unit following a thorough review of its global operations.

The decision affects Shell Downstream SA (SDSA), which was established through the merger of Shell South Africa Marketing and Shell South Refining businesses a decade ago, in collaboration with black empowerment company Thebe Investment Corporation, which holds a 28% equity stake.

Having maintained a presence in South Africa for over a century, Shell's decision to divest its majority shareholding in SDSA reflects its realignment efforts across all regions. Despite this move, Shell continues to explore offshore opportunities in South Africa, a venture met with opposition from environmental activists who have initiated legal proceedings.

Key Takeaways

One of the key assets of SDSA, Sapref, South Africa's largest refinery located in the east coast port city of Durban, has been non-operational since 2022. Shell and its refinery joint venture partner, BP (BP.L), opted for a spending freeze and suspended operations at the refinery during that time. Furthermore, the plant suffered severe damage due to flooding along the coast in the same year, resulting in nearly 400 casualties. Sapref, at that juncture, accounted for approximately 35% of South Africa's refining capacity.

Shell

Oil and Gas

Shell Downstream SA

Energy

Downstream

South Africa