Shell selling 600 petrol stations in South Africa

Shell is nearing the sale of its fuel stations in South Africa to a unit of Abu Dhabi’s biggest oil company in a deal valued at about $1 billion (R16.3 billion), according to people familiar with the matter.

Shell and the retail arm of Abu Dhabi National Oil Company are preparing to announce an agreement in the coming days, the people said, asking not to be identified as the matter is private.

A transaction would give the Middle Eastern company control over 600 retail fuel outlets, or about 10% of the market in Africa’s biggest economy, adding to Adnoc’s deal spree as it expands globally.

Adnoc Distribution emerged as the preferred bidder for the portfolio earlier this year after talks with Gunvor Group — one of the world’s biggest independent oil traders — fell through.

For Shell, the sale would be a step forward in its plan to sell non-core holdings as it focuses on assets such as those in Canada in a push to sustain oil and gas production in the long-term.

Talks are advanced, and no final agreement has been reached, the people said. Shell and Adnoc Distribution declined to comment. 

The sale process, which started in 2024, has progressed despite the conflict in the Middle East, bringing large-scale disruption to Adnoc’s business.

The company’s investment unit XRG this week announced the purchase of a stake in a gas project in Argentina, and has said it plans to add to global deals that have already seen it invest in assets from the US to Africa and Europe

The acquisition will add to a string of recent overseas deals by Gulf investors, who have continued to deploy billions of dollars globally across deals spanning alternative asset managers, private credit and technology platforms.

Earlier this month, two of Abu Dhabi’s biggest wealth funds agreed to commit £1.5 billion to back private equity firm EQT’s acquisition of Intertek.

The retail fuel market in South Africa has changed significantly in recent years, with trader Glencore acquiring Chevron’s Caltex-branded stations in 2018, while Vitol’s Vivo Energy last year bought Engen, the nation’s largest fuel-station chain.

Shell itself sold South Africa’s largest refinery to the state-owned Central Energy Fund after the oil major had stopped processing there in 2022.