You can also listen to this podcast on iono.fm here. ADVERTISEMENT CONTINUE READING BELOW JEREMY MAGGS: Well, let’s turn our attention now to Shell, which has been operating in South Africa for over 100 years, and you might have read at the weekend that it is on the verge of exiting the country, reportedly because of a fallout with its longtime BEE partner, Thebe Investment Corporation. I’m joined now by political and economic commentator, Khaya Sithole.
When they said they wanted to activate that clause of selling a part of the shareholding, their agreement that was signed many years ago says that, well, you simply need to get a valuation of that stake and then we can talk. What Shell did is that it provided information to Thebe, which was to be used as a basis for the valuation.
The question of Shell exiting the South African business is a completely new story that unfortunately emerged whilst there was still this deadlock or this gridlock on the BEE stake. So now suddenly it sounds like they’re related, but they’re actually not.
I think you’ll remember what we heard about the refineries down on the coast that actually cannot be kept going on the basis that no one is willing to put up the cash and the resources. I think it’s a bigger South African problem, where we have to evaluate whether we actually need to do something different in managing those particular assets so that companies like Shell and other investors that are already part of the South African petroleum ecosystem can remain invested.
But obviously, they have evaluated what their spectrum of possibilities are, and they’ve decided that a part of the South African business probably isn’t as attractive as it used to be, so therefore they’re happy to exit that part of the business. ADVERTISEMENT CONTINUE READING BELOW Now, of course, that doesn’t mean that people are going to stop using those products overnight.
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