- ADNOC emerges as preferred bidder for nearly 600 service stations. Deal could be finalised within the current quarter, subject to approvals.
- Transaction signals growing Middle East investment in Africa energy markets.
The Abu Dhabi National Oil Company (ADNOC) is in advanced negotiations to acquire the South African retail fuel network of Shell in a deal valued at about US$1bn. The transaction would include close to 600 service stations, representing roughly 10% of the national fuel retail market.
Sources indicate that ADNOC has been selected as the preferred bidder after earlier discussions between Shell and Gunvor Group failed to reach agreement. A final deal could be concluded within the current quarter, although neither party has formally confirmed the outcome.
Shell’s planned exit from South Africa’s downstream fuel sector marks the end of more than 120 years of operations in the country. The company is repositioning its global portfolio towards upstream oil and gas exploration and production, in line with broader strategic shifts among international oil majors.
For ADNOC, the acquisition aligns with its aggressive international expansion strategy. The company has committed up to US$150bn in capital expenditure by 2030 to strengthen its global energy presence, with Africa emerging as a key growth market.
The transaction is expected to have implications for South Africa’s fuel supply chain and competitive landscape. Petrol prices in the country remain regulated by the Department of Mineral and Petroleum Resources, meaning consumers are unlikely to see immediate price changes at the pump. However, diesel prices are not regulated, creating an opportunity for ADNOC to introduce more competitive pricing strategies across its network.
South Africa’s increasing reliance on imported refined fuels, following refinery closures such as the SAPREF refinery, has raised concerns around supply security. ADNOC’s integrated global refining and trading capabilities could provide more stable supply channels and potentially reduce exposure to import parity pricing pressures.
The deal also reflects a broader shift in market dynamics, with Middle Eastern state backed energy firms increasing their footprint in Africa. ADNOC’s entry follows interest from players such as Saudi Aramco, signalling a transition away from traditional Western oil majors.
However, the transaction faces several regulatory and operational hurdles. Approval from the Competition Commission is required, alongside compliance with Black Economic Empowerment regulations. In addition, BP has exercised pre-emption rights over a key storage terminal in Durban, which could impact ADNOC’s logistics strategy and may require further infrastructure investment.
If completed, the acquisition would mark a significant milestone in South Africa’s evolving energy sector, with potential long-term impacts on supply stability, infrastructure development and market competition.
Author: Bryan Groenendaal
