Shell offloads SA downstream business to Abu Dhabi
LONDON – British energy giant Shell announced on Tuesday a deal to sell its South African downstream business, including 580 fuel stations, to Abu Dhabi National Oil Company (ADNOC). Shell said the sale,. . .
LONDON – British energy giant Shell announced on Tuesday a deal to sell its South African downstream business, including 580 fuel stations, to Abu Dhabi National Oil Company (ADNOC). Shell said the sale, valued at about US$1 billion, was part of its strategy to focus on “key markets”, while the company separately flagged a sharp drop in second-quarter gas production due to the US-Iran war. ADNOC said the “acquisition marks a major step towards” its “ambition to become a global mobility and convenience retailer while advancing its fuel-retailing footprint in Africa. ”“Shell South Africa Holdings… has agreed to sell its equity interest in Shell Downstream South Africa” to ADNOC, the British group said in a statement. “The transaction is expected to be completed in 2027, subject to regulatory approvals,” it added. Shell said the company’s brand would remain in South Africa through licensing agreements, and customers would continue to have access to Shell’s premium fuels and lubricants. In a separate update, Shell said its gas production had slumped in the April-June period to a maximum of 650 000 barrels of oil equivalent per day, down from 909 000 barrels per day in the first quarter. Shell said the drop “reflects the impact of the Middle East conflict on Qatari volumes. ”Shell’s gas production was affected after the world’s largest liquefied natural gas hub, Ras Laffan in northern Qatar, sustained significant damage during the war. Following the updates, Shell’s share price rose nearly 3% in London morning deals. “There was a sense of relief at Shell after it said second-quarter integrated gas production would be better than previously expected,” noted Dan Coatsworth, head of markets at AJ Bell, adding that the company was further boosted by Tuesday’s rise in oil prices. Shell also noted that its gains from oil and gas trading “are expected to be significantly higher” in the second quarter compared with the first, as the company benefited from volatile markets caused by the Middle East conflict. Shell publishes its full quarterly results on 30 July. -Nampa/AFP