Shell’s future in South Africa appears uncertain amidst a reported dispute with its long-term BEE partner, Thebe Investment Corporation. The disagreement centres on the valuation of Thebe’s 28% stake in Shell Downstream South Africa (SDSA), with Thebe placing it at $200 million (R3.7 billion) and Shell allegedly contesting that value.
This discord reportedly led Shell to contemplate exiting the South African market entirely. Shell is a major player in the country, boasting over 600 gas stations and exploration rights granted by the Department of Mineral Resources and Energy. Their potential departure would follow a recent trend of multinational corporations questioning South Africa’s investment viability.
While both Shell and the South African government have declined to comment on these reports, the news raises concerns for the thousands of Shell employees in South Africa. The situation also adds to the ongoing debate about South Africa’s attractiveness to foreign investors, with some citing infrastructure and policy challenges as deterrents, while others highlight positive aspects like a deep capital market and political stability.
The situation could prompt a critical examination of the nation’s investment climate and its impact on multinational corporations’ strategies. The coming days and weeks will likely see further developments in this saga. Whether Shell and Thebe can reach an agreement or if the oil giant truly exits South Africa remains to be seen. This story will undoubtedly be of interest to investors, employees, and the broader South African business community.
Sources:City Press, Sunday Times, My Broadband, The Citizen.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
