After more than a century, South Africans will officially say goodbye to Shell retail fuel stations as Abu Dhabi-based oil company Adnoc agrees to acquire them in a R16bn deal.
According to a statement, Adnoc Distribution will gain control of 580 retail stations in the country as well as wholesale fuel, aviation and lubricants operations.
Local empowerment
Bloomberg reports that the deal is expected to close next year, after which the company expects to sell 28% of the business to “a local empowerment partner” and distribute employee stock options.
The statement furthermore indicates that Adnoc will continue to use the Shell brand for the retail stations and lubricants in South Africa under a long-term brand licensing agreement.
Adnoc emerged as the preferred bidder after Shell's negotiations with commodity trader Gunvor Group fell through.
Even though the conflict in West Asia has disrupted Adnoc and other major energy companies in the Middle East, the sale process, which started in 2024, has progressed.
Adnoc, which before the Iran war produced some 4% of global oil output, had previously disclosed plans to invest $150bn between 2026 and 2030 to drive growth and meet global energy demand.
Fuel market shake-up
This latest Adnoc acquisition is set to shake up the South African retail fuel market, which is already in flux.
Reuters reported that late in 2024, Shell disclosed plans to exit its downstream businesses in the region.
Similarly, TotalEnergies announced it would give up its licence to drill for oil and gas off the coast of South Africa.
In 2018, Glencore acquired Chevron’s Caltex-branded stations, while Vitol Group’s Vivo Energy bought the country’s biggest fuel-station chain, Engen, last year.
Shell itself sold South Africa’s largest refinery to the Central Energy Fund after the oil major had stopped processing there in 2022.
