The Royal Dutch Shell logo is seen at a Shell petrol station in London.Shell has confirmed that it intends to divest its shareholding in its South African downstream business. It says it isThis confirms weekend reports that the company intends to exit South Africa but was mum on reports of conflict between itself and its BEE partner Thebe Investments.
In a statement, It has committed that it will maintain its brand presence in the divestment process. “Shell has decided to reshape the downstream portfolio and intends to divest our shareholding in Shell downstream South Africa. Considering SDSA’s illustrious history, this decision was not taken lightly. During the divestment process, we will work to preserve Shell downstream South Africa’s operating capabilities, maintain the Shell brand presence and secure the best possible outcome for our people and customers in South Africa under new ownership,” says Pam Ntaka, Shell spokesperson.
Roy Mutooni, portfolio manager at Sanlam investments, says the closure of the refineries could be the reason for Shell to pull out of the country. But also warns that multinationals continually change their strategy and change direction. “If you look a lot at their disclosure, they’ve been retreating away from downstream business globally. That’s the business that they were involved in here in South Africa. I think the refinery closing and their interest has come down. So maybe that is the driver of what’s happening with regards to delisting. It’s not a pure JSE thing. We’ve seen that in all stock market globally.