Minister Gwede Mantashe. (Dean Vivier/Netwerk24)
South Africa's Department of Energy has indicated it may reduce oil exploration permits for Shell over the company's plans to exit the country's fuel supply business.
The oil major will sell its stake in Shell Downstream South Africa, which has a network of 600 petrol stations across the country, following a review of its business across regions and markets. Mineral Resources and Energy Minister Gwede Mantashe said he had requested a meeting with Shell officials to discuss the issue.
“They still want to stay upstream, so what we should do is be more reluctant to grant licenses and permits to Shell at that level,” Mantashe said on Thursday. He spoke in an interview during a campaign event. Richards Bay.
Shell's oil exploration operations are facing multiple challenges in South Africa, with the company abandoning its license due to legal uncertainty. The country's upstream petroleum resources development bill has not yet been finalized, after years of process. Environmental groups are also blocking hydrocarbon exploration in South African waters through legal action.
Shell has been considering exiting a key part of South Africa's fuel supply business since at least 2021, with the potential sale of the country's largest crude oil processing facility, the 180,000 barrels per day Sapulef refinery, along with BP. I started considering it. The factory closed the following year and the government began considering the possibility of taking it over.
“We will seek to maintain Shell-branded service stations under new ownership through brand licensing agreements,” the company said in an emailed response to a request for comment. He declined to comment on the minister's remarks.
Mantaş suggested that geopolitical factors may be involved in the withdrawal of Western companies. “The European Union is not happy with us,” he said, citing the victory of South Africa's lawsuit against Israel's war against Hamas at the International Court of Justice earlier this year.
“The terms of our engagement with Shell will be based on national interests,” Mantashe said.
The minister said he would discuss with Shell a reported impasse with local equity partner Thebes Investment Corporation, which holds a 28% stake in Shell's downstream operations. Johannesburg-based news website Daily Maverick reported on May 8 that the South African company is in a dispute with Shell over the value of its shares.
