Shell Plc is reportedly close to selling its fuel stations in South Africa to a unit of Abu Dhabi National Oil Company (Adnoc) for approximately $1 billion. This deal would grant the Middle Eastern company ownership of 600 retail fuel outlets, representing about 10% of the market share in South Africa, which is Africa's largest economy. The agreement is expected to be announced in the coming days, marking a significant expansion for Adnoc globally and furthering Shell's strategy to divest non-core assets.
Adnoc Distribution, the retail arm of Abu Dhabi National Oil Co., emerged as the preferred bidder earlier this year after prior discussions between Shell and Gunvor Group, a major independent oil trader, did not materialize. Other companies that had shown interest in Shell's South African assets included Trafigura's Puma Energy, Sasol Ltd, and state-owned PetroSA, but they are no longer involved in the process. The sale indicates Adnoc's continued global expansion, adding to recent deals in locations ranging from the US to Africa and Europe.
Shell's decision to sell these assets aligns with its broader plan to shed non-core holdings to focus on more central assets, such as those in Canada, to sustain long-term oil and gas production. The South African retail fuel market has seen significant changes in recent years, with Glencore acquiring Chevron's Caltex stations in 2018 and Vitol Group's Vivo Energy purchasing Engen, the country's largest fuel station chain, last year. Shell itself sold its largest South African refinery to the state-owned Central Energy Fund in 2022.
The sale process, which began in 2024, has progressed despite ongoing geopolitical tensions in the Middle East. Adnoc's investment unit, XRG, recently acquired a 32% stake in three upstream gas blocks in Argentina. Adnoc Distribution itself reported a 21% year-on-year increase in net profit for the first quarter of 2026, reaching $210 million (AED771 million), with revenue increasing 14% annually to $2.4 billion (AED8.8 billion). The company plans to open 60 to 70 new sites this year, adding to its existing network of 1,032 service stations by the end of March.
