End of an era coming for Shell in South Africa

Shell is in advanced talks with Abu Dhabi National Oil Company to sell its retail fuel stations in South Africa, according to people with knowledge of the matter.

Adnoc emerged as the preferred bidder after Shell’s talks with Gunvor — one of the world’s biggest independent oil traders — fell through, said the people who asked not to be identified as the discussions are private. An agreement maybe reached as early as this quarter, they said.

An Adnoc unit said the company continually reviews opportunities for growth and declined to comment further. Shell declined to comment. 

Acquiring Shell’s 600 retail fuel outlets will give Adnoc about 10% of the market in Africa’s biggest economy. The deal is likely to be valued at about $1 billion (R16.3 billion), the people said.

The sale process started in 2024 and has advanced despite the conflict in the Middle East, showcasing Adnoc’s desire to expand in the world’s second-largest continent. 

In April, Adnoc agreed to invest $500 million with its partner BP to develop a gas field in Egypt, and has also been expanding its retail presence in that country. 

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 Group’s Vivo Energy last year bought Engen, the nation’s largest fuel-station chain. 

Shell has been looking to sell its non-core holdings globally. Other interested parties in the South African assets included Trafigura’s Puma Energy, Sasol and state-owned PetroSA, though they aren’t part of the process anymore, the people said. 

Should this sale proceed, it would mark the end of an era for Shell, with the company having operated filling stations in South Africa for roughly a century.

The company began operating in South Africa in 1902 and initially focused on importing paraffin and kerosene to provide light and heat, rather than petrol for motor vehicles.