The planned divestment was first disclosed in May 2024, when Reuters reported that oil major Shell (SHEL.L) intended to sell its majority shareholding in Shell Downstream South Africa (SDSA) following a comprehensive review of its businesses across all regions.
“As a result of this review, Shell has decided to reshape the downstream portfolio and intends to divest our shareholding in SDSA … this decision was not taken lightly,” the company said in a statement at the time. It did not specify when the decision would take effect.
The move forms part of a broader strategy to reduce downstream exposure and focus more on upstream activities such as oil and gas exploration and production.
The assets are held through Shell Downstream South Africa, the group’s local downstream unit, which operates one of the country’s largest fuel retail networks.
If completed, the divestment would close a chapter that began in 1902, when the company first entered South Africa supplying petroleum used for lighting and heating homes.
Sale process still underway
Nearly two years after the announcement, the sale has yet to be concluded. However, the company confirmed that the process is still ongoing.
“Shell Downstream South Africa (SDSA) confirms that the divestment process remains underway,” the company said in comments confirmed to BusinessTech.
“As a matter of policy and principle, we do not disclose information related to confidential commercial processes.”
International bidders show interest
Earlier reports suggested strong international interest in the assets. Bloomberg previously reported that Abu Dhabi National Oil Co. (ADNOC) and Swiss commodities trading firm Gunvor were among companies shortlisted to acquire the downstream operations.
Other potential bidders had included Trafigura’s Puma Energy, Sasol and South Africa’s PetroSA, although people familiar with the matter later indicated that those firms were no longer in contention.
At the time the divestment process began, the South African downstream assets were estimated to be worth about $1 billion, or roughly R16.4 billion.
Competitive fuel retail market
South Africa’s fuel retail market is highly competitive, with several major international and domestic energy companies operating extensive nationwide service station networks.
Key competitors include Sasol, BP, TotalEnergies, Engen Petroleum and Astron Energy, all of which maintain significant fuel distribution and retail infrastructure across the country.
The presence of these companies has helped create one of the most competitive fuel retail markets on the African continent.
Global restructuring
The planned divestment forms part of a broader restructuring of Shell’s global portfolio as the energy major reshapes its downstream operations.
In 2022, the company simplified its corporate structure and moved its headquarters fully to the United Kingdom, changing its name from Royal Dutch Shell to Shell plc.
Today, the energy giant operates in more than 70 countries and runs roughly 40,000 fuel service stations worldwide.
Across Africa, the multinational has maintained a particularly long presence in Nigeria and South Africa, where its operations date back more than a century.
Gradual reduction of downstream assets
In recent years, however, the company has gradually reduced its downstream footprint as part of its global restructuring strategy.
Fuel retail and refining assets have been sold in several markets, including Australia, Botswana, Burkina Faso, Côte d’Ivoire, Guinea, Kenya and Namibia.
Despite the planned exit from parts of its retail and refining activities in South Africa, the group continues to pursue offshore energy exploration projects in the country, although some initiatives have faced legal challenges from environmental groups.
For South Africa, the eventual sale would bring to a close more than 120 years of direct involvement by the multinational in the country’s fuel retail sector.
