June 22, 2024
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OIL & GAS

Shell to Divest from Downstream Operations in South Africa

Shell has announced plans to divest from downstream operations in South Africa following an internal portfolio review, according to statements reported by Reuters and confirmed in an interview with South Africa’s Daily Maverick.

The decision marks a strategic shift for Shell Downstream SA (SDSA), a partnership formed with Thebe Investment Corporation a decade ago.

In response to questions from Daily Maverick, the oil giant released a statement saying, “Shell has decided to reshape the Downstream portfolio and intends to divest our shareholding in Shell Downstream South Africa (SDSA).”

The statement also stated that the decision was made after a thorough review of “…the Downstream and Renewables businesses across all regions and markets in line with Shell’s focus on performance, discipline, and simplification.”

As part of Shell’s broader effort to reshape its downstream portfolio and streamline operations globally, one contributing factor to SDSA’s inclusion on the divestment list may be the shutdown of the Sapref refinery in Durban since 2022.

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The refinery, co-owned by BP and Shell, ceased operations following a spending freeze and severe flooding, significantly impacting South Africa’s refining capacity.

In line with its energy transition strategy, Shell also plans to divest from 1,000 fuel stations in the coming years to focus on expanding its EV charging infrastructure. Despite these divestments, Shell remains committed to its offshore operations in South Africa, maintaining its presence despite environmental protests.

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