ADNOC, Aramco considering bids for Shell’s South African assets – report

Abu Dhabi National Oil (ADNOC) and Saudi Aramco are among companies weighing bids for Shell’s downstream assets in South Africa, Bloomberg News reported on Friday, citing people familiar with the matter.

South Africa’s Sasol is also considering an offer for the business, which could be valued at more than $800m, the Bloomberg report said.

“We have been approached by several highly credible parties which cannot be disclosed at this stage,” a Shell spokesperson told Reuters.

Shell’s exit from South Africa

Earlier this month, Shell announced a plan to 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. It did not specify when the decision took effect.

Shell Downstream SA (SDSA) was formed after Shell South Africa and black empowerment company, Thebe Investment Corporation, agreed a decade ago to merge Shell South Africa Marketing and Shell South Refining businesses. Thebe held a 28 per cent equity stake.

Shell, which has been present in South Africa for more than century, is still exploring the country’s offshore, incurring opposition from environmental campaigners who have launched court action.

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 joint venture partner, BP, decided on a spending freeze and halt to the refinery’s operations.

Flooding along the coast that killed nearly 400 people that same year severely damaged the plant, which at that stage provided around 35 per cent 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 barrels per day, as it seeks to overcome energy security concerns.