- Shell has announced in a statement that it is divesting its majority shareholding in Shell Downstream SA (SDSA) after a comprehensive review of its businesses across all regions.
“As a result of this review, Shell has decided to reshape the downstream portfolio and intends to divest our shareholding in SDSA … this decision was not taken lightly,” a Shell statement said. It did not specify when the decision will take effect.
SDSA was formed after Shell South Africa and black empowerment company, Thebe Investment Corporation, agreed a decade ago to merge Shell South Africa Marketing and Shell South Refining businesses. Thebe held a 28% equity stake.
Shell has seen a pushback on its seismic survey exploration efforts off the Wild Coast of South Africa by environmental groups which has brought the venture to a standstill. Read more
Shell SA has also been involved in the failed Karpowership SA bid to generate 1220MW of power from three floating gas power plants in South Africa. The country’s Mineral Resources and Energy Minister, Mr Gwede Mantashe, awarded the three Karpowership projects preferred bidders status in the country’s Risk Mitigation IPP Procurement Programme (RMIPPPP). The programme has been a failure where there are key contractual issues, environmental approval challenges and tender rigging allegations.
The ANC government put all their eggs in one basket, a risk for the country, by authorising an exclusive supply agreement to Shell South Africa for the bid which has failed. The country’s energy utility, Eskom, has pulled grid access allocation for the projects. Read more
The investment arm of the ANC, the Batho Batho Trust, has a 51% per cent stake in Shell South Africa’s black economic empowerment partner, the Thebe Investment Corporation. The ANC’s links to Shell are very well explained by respected New24 journalist Lameez Omarjee. Read more
South Africa faces national elections on the 29th May and it is expected that the country will have a coalition government which may trigger a redress of the country’s up and downstream oil and gas sectors.
The country’s current supply of gas (from Mozambique) to industrial users ceases in 2026 and the recently released draft Gas Master Plan fails to the address the impending crisis. Read more
Author: Bryan Groenendaal
