Shell to exit South Africa's downstream businesses
Shell will divest its majority shareholding from a local South African downstream unit after 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," a Shell statement said.
Shell Downstream SA (SDSA) was formed a decade ago after Shell South Africa and Thebe Investment Corporation agreed to merge Shell South Africa Marketing and Shell South Refining businesses-Thebe held a 28% equity stake.
Shell, which has been present in South Africa for more than century, is still exploring the country's offshore sector.
During the divestment process, Shell said it would work to preserve SDSA's operating capabilities and maintain its brand presence. One of SDSA's main assets and South Africa's largest refinery, Sapref, in the east coast port city of Durban has not been operating since 2022 when Shell and its refinery JV partner, bp, decided on a spending freeze and halt to the refinery's operations.
Flooding along the coast that same year severely damaged the plant, which at that stage provided around 35% of South Africa's refining capacity.
South Africa's Central Energy Fund said two years ago it was interested in Sapref, which has a nameplate capacity of 180,000 bpd, as it seeks to overcome energy security concerns.
South Africa is a net importer of refined petroleum products, a challenge exacerbated since the closure of Sapref and the country's second largest refinery Enref, also in Durban.
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