Major Oil Company Shell Considers Leaving South Africa

 By Onthatile Mahlangu 

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Two recent articles from the City Press and the Sunday Times indicate that Shell, a major player in the oil industry, is considering withdrawing from its operations in South Africa.

According to the Sunday Times, Shell has told Energy Minister Gwede Mantashe and Trade & Industry Minister Ebrahim Patel of its plan to leave SA.

Spokesperson of Shell Pam Ntaka said Shell has undertaken a comprehensive review of the Downstream and Renewables businesses across all regions and markets in line with Shell’s focus on performance, discipline, and simplification. As a result of this review, Shell has decided to reshape the Downstream portfolio and intends to divest our shareholding in Shell Downstream South Africa (SDSA). 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,” Ntaka added.

 Shell originally embarked on a refinery processing deal in 1998 with Tepco, an energy company owned and established by Thebe Investment Corporation. This was followed by joint ventures with Tepco in 2001 in aviation and commercial fuels.

The intention of Thebe Investments, the global group, to sell its 72% share in Shell Downstream South Africa has led to a dispute regarding the valuation of Thebe's remaining 28% ownership stake in the company, causing conflict between the involved parties, this is according to the City Press.

Meanwhile, citizens on X blame the government for the potential departure of the oil industry from South Africa.

Vrystaat Boerwors tweeted that “Black Economic Empowerment (BEE) partner (ANC code for corruption useless thieves) demanded an impossible increase in their share," implying frustration with the (BEE) policies and their impact on business dealings.

The BEE’s goals are to: Redress past inequalities, promote ownership and wealth creation, and transform the economy.

However, people argue that BEE can be misused for corruption, with some companies focusing on ticking a BEE ownership box rather than genuine transformation.

There are debates about how effective BEE policies are in achieving their goals. Some argue it benefits a small, wealthy elite rather than the broader Black population.

"What did the BEE ever contribute to Shell's business activities - or were they there for the free ride?" This question reflects skepticism about the actual contributions of BEE partners to Shell's operations, hinting at concerns over the effectiveness and fairness of BEE partnerships in the business landscape.