Abu Dhabi National Oil Co. (Adnoc) is nearing a deal to acquire Shell Plc's retail fuel stations in South Africa. The transaction is reportedly valued at about $1 billion and would give Adnoc control over approximately 600 retail fuel outlets, representing about 10% of the South African market. Adnoc Distribution, a unit of the Abu Dhabi-based company, emerged as the preferred bidder after earlier negotiations between Shell and Gunvor Group, a major independent oil trader, fell through. An agreement could be announced as early as this quarter.
This potential acquisition aligns with Adnoc's global expansion strategy, as the company has been actively deploying capital in overseas deals. The sale signifies a move by Shell to divest non-core assets, allowing it to reallocate resources towards other segments, such as oil and gas production assets in Canada. Shell had previously sold its largest refinery in South Africa to the state-owned Central Energy Fund in 2022 after ceasing processing operations there.
The retail fuel market in South Africa has seen significant consolidation and changes in recent years. Other notable transactions include Glencore Plc's acquisition of Chevron Corp.'s Caltex-branded stations in 2018, and Vitol Group's Vivo Energy purchasing Engen, the nation's largest fuel-station chain, last year. Adnoc's entry into the South African retail fuel market would mark a significant step in its international growth, building on previous investments in locations ranging from the US to other parts of Africa and Europe.
