Shell Plc and its South African partner are close to settling a valuation dispute, which would allow for the sale of Shell’s local downstream assets, potentially worth up to $1 billion, according to sources familiar with the situation.
The company operates 600 service stations across South Africa, while Thebe Investment Corp., a Black-owned firm, holds a 28% stake in the local retail operation, purchased in 2002 for around $70 million, according to Bloomberg.
The agreement to proceed with the sale, overseen by Rothschild and Co., will offer potential buyers clarity on the deal’s size as they submit binding offers in the coming weeks, sources said.
The assets have attracted interest from several prominent companies, including Saudi Aramco, Abu Dhabi National Oil Co., and trading firm Trafigura, as reported by Bloomberg in September.
Shell and BP Plc jointly owned Sapref, South Africa’s largest oil refinery, and sold it for a symbolic 1 rand (about five US cents) to the state-owned Central Energy Fund after both oil majors ceased operations there in 2022.
A sale of Shell’s downstream assets would follow Petroliam Nasional Bhd’s 2023 sale of its 74% stake in Engen Ltd., South Africa’s largest gas-station chain, to a unit of trading house Vitol Group.
