International oil giant Shell is preparing to pull out of South Africa after operating in the country for over 120 years, City Press and Sunday Times report.
The news reportedly follows a dispute between the oil giant and its long-term BEE partner, Thebe Investment Corporation, over an R3.7-billion stake in Shell Downstream South Africa (SDSA).
The row started in 2022 when Thebe wrote to Shell, revealing its desire to implement its “opt-out” clause and cash out to reinvest the funds in growing the company.
Thebe submitted a stake valuation based on the figures that Shell had provided. It valued its 28% stake in SDSA at $200 million (R3.7 billion).
However, Shell didn’t respond to its submission for eight months, and when it eventually did, it reportedly backtracked on its figures and said Thebe’s stake was worthless.
Thebe shareholders called the situation “The Great Dutch Heist”, and City Press quoted them as saying they feel “robbed and used”.
The shareholders believe Shell deliberately delayed responding to orchestrate its exit from South Africa.
Shell Downstream South Africa declined to comment, providing the following statement:
As a matter of policy and principle, Shell Downstream SA distances itself from speculation or rumours, particularly in relation to confidential shareholder agreements and relationships. Out of respect for our partners and these agreements, we’re unable to provide any further comment currently. As a responsible company, we take our communication and stakeholder engagement commitments very seriously and will always proactively communicate through the appropriate channels and forums, as and when required to do so.
The international oil giant has a large footprint in South Africa, with more than 600 forecourts nationwide. The Department of Mineral Resources and Energy has also granted Shell exploration rights.
Most recently, it was locked in a legal battle with Wild Coast communities, Sustaining the Wild Coast, All Rise, Natural Justice and Greenpeace Africa, over the right to conduct seismic surveys off the country’s east coast.
While a court ruling had blocked the surveys and the High Court could see no prospects of success for an appeal, it granted Shell Plc, Impact Africa, and South African energy minister Gwede Mantashe leave to appeal the ruling.
In September 2022, a South African court denied Shell Plc’s plan to conduct the oceanic seismic survey, saying the exploration rights granted by Mantashe didn’t follow procedure.
Shell was first granted the exploration right in 2014 for seismic blasting on the Wild Coast, where visitors often spot Humpback and Southern Right whales.
The plans faced resistance from coastal communities, civil society groups, and large petitions. Many people chose to boycott the use of Shell petrol stations.
In 2021, the High Court temporarily blocked the seismic survey over concerns that communities hadn’t been properly consulted, environmental impact assessments were outdated with new laws, and marine life could be harmed.
A Shell spokesman said at the time that they remained committed to South Africa and their role in the just energy transition.
